Net profit dips $123 million from a year earlier
SYDNEY, Australia (Reuters) — Australia’s largest listed agribusiness says its annual net profit fell 64 percent from a year earlier as dry weather led to lower grain volumes.
GrainCorp’s net profit was $49.5 million for the full year ending Sept. 30, compared with $172 million the previous 12 months.
Operating net profit was $93.5 million, excluding one-off costs.
The company slashed its final dividend to five cents from 20 cents as revenue fell eight percent to $4.03 billion.
“Growers have had to contend with continued hot and dry conditions in many areas, compounding the challenges of the growing season,” said chief executive officer Mark Palmquist, who took the position last month and is filling a 10-month vacancy.
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
“While it’s a smaller crop, the quality is generally good and we are all hoping for a good, clean run through to the end of harvest.”
Uncertainty about GrainCorp’s future has lingered since late last year when a newly elected Australian government scuttled a $2.8 billion takeover bid by Archer Daniels Midland, citing national interests.
The situation became even more volatile when the company’s CEO, who had planned to leave following the takeover anyway, left soon after the government rejected the deal.
The firm will have to show it can prosper as an expected El Nino weather pattern causes drier weather and lower grain production on Australia’s east coast, where it has most of its business.
Palmquist said GrainCorp expects the environment for its core grains business to remain tight in the 2015 financial year, with below average volumes resulting in less product available for export.
Meanwhile, the government has since been reported to have softened its stance on foreign takeovers, and ADM has kept its 19.9 percent stake in GrainCorp, stoking speculation it may make another run at buying the Australian company.
