- GrainCorp (GNC) upgrades its earnings guidance for the 2021 financial year (FY21) from $255–$285 million to $310–$330 million
- CEO and managing director Robert Spurway says heightened demand for Australia grain has bolstered an outstanding year for agribusiness
- The updated forecast remains subject to various market conditions
- Preparations for the winter harvest are underway as GNC increases storage capacity at its east coast operations to accomodate a large crop in FY22
- Shares are up 14.4 per cent to $6.26 each at 12:35 pm AEST
Integrated grain and edible oils business GrainCorp (GNC) has upgraded its earnings guidance for the 2021 financial year (FY21) to between $310 million and $330 million.
The range for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was previously $255–$285 million.
Likewise, GrainCorp’s underlying net profit after tax (NPAT) for the period has jumped from $80–$105 million to $125–$140 million.
In light of the forecasts, GNC said its upgraded earning guidance remained subject to market variables such as the timing of exports, strength of the new crops and prevailing weather conditions.
The company’s managing director and CEO Robert Spurway said heightened demand for Australian grain had bolstered an outstanding year for the agribusiness segment.
“We are pleased to upgrade our FY21 earnings guidance, which reflects the strong performance of our east coast Australian grains business, following the bumper 2020–21 harvest,” he said.
“Post-harvest winter receivals and higher summer receivals, coupled with a favourable outlook for the upcoming winter crop, have supported strong export volumes, forward contracted sales and supply chain margins.”
The company expects to see total exports for FY21 clock in at the upper end of previous expectations between 7–8 million metric tonnes.
Further, and as a result of higher-than-expected summer crop receivals, GNC anticipates grain carryout, as at September 30, to land at the northern end of 3.5–4.5 million metric tonnes.
Winter harvest 2021–22
In other news, the company is preparing for the upcoming winter harvest with what it considers to be a strong maintenance and capital investment program.
GNC anticipates its total FY21 capital expenditure (capex) will come to around $55 million, including $50 million in sustaining expenditure.
The figure represents an increase to its sustaining capex target of $35–$45 million, which Graincorp attributes to additional storage requirements and other upgrades made at its ECA network to accomodate a large crop in FY22.
“Currently, our teams are working to ensure our network is equipped to handle the new crop at the right time and in the right locations,” Mr Spurway said.
“We’re also recruiting more than 3000 harvest casuals to help manage that demand across 160 up-country sites and ports.”
GrainCorp shares were up 14.4 per cent to $6.26 each at 12:35 pm AEST.