Reuters — Graincorp said it expects underlying profit for the fiscal year 2022 to be about 2.5 times that of last year, as the Australian agribusiness firm benefits from supply constraints due to the Ukraine war, sending its shares to a record high.
Australia, the world’s sixth-largest wheat exporter, is set to ship a record volume this year as buyers look for suppliers to replace cargoes from Russia and Ukraine.
“The conflict in Ukraine and resulting trade disruptions in the Black Sea region have created uncertainty in global grain markets, with buyers looking for (alternative) sources of supply,” Graincorp chief executive officer Robert Spurway said.
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The company said its ports were operating near capacity despite disruptions caused by flooding on the East Coast.
Shipping slots on the eastern and western coasts of the country have been booked since March, following a second straight year of a record wheat crop, which has kept a lid on Australian wheat prices.
“GNC continues to benefit because ultimately their (logistical) assets act as a bottleneck to exports, which allows them to control price — extremely advantageous when other supply chains are tight”, analysts at RBC Capital Markets said.
Graincorp expects annual underlying net profit after tax of $290 to $347 million, up from its previous forecast of $220 to $262 million and far higher than the $130 million reported last year.
The company added that its processing business was also performing strongly, with oilseeds benefiting from strong global demand for crude and refined vegetable oils.
It also pointed to higher export supply-chain margins and a good crop season, both supporting its higher profit outlook.
