GrainCorp Profit Drops 36% on ‘Challenging’ Global Conditionsby
Shares slide 4.6% for biggest decline since November 2013
Hot, dry weather affecting crops in eastern Australia
GrainCorp Ltd., the biggest crop handler in eastern Australia, said full-year earnings fell 36 percent amid “challenging conditions” in global grain markets.
Net profit after tax was A$32 million ($23 million) in the year to September 30, based on unaudited results, compared with A$50 million a year earlier, the Sydney-based company said Tuesday in a statement. Audited results will be released on Nov. 12, it said.
“Lower grain production in eastern Australia resulted in intense competition to originate grain, while bigger crops and stock levels in other regions also generated strong competition,” Chief Executive Officer Mark Palmquist said in the statement. “Continued challenging conditions in global grain markets have affected the result.”
GrainCorp shares fell 4.6 percent to A$8.48, for the biggest decline in two years. Wheat futures have dropped 14 percent this year on the Chicago Board of Trade, with global grain inventories expected to climb to the highest in almost three decades, according to the International Grains Council. Australia is a top five global wheat exporter.
With the harvest already under way in eastern Australia, the company said that hot and dry conditions in parts of Victoria and New South Wales were affecting crops.
“This will temper grain production forecasts,” Palmquist said. “There is a long way to go before harvest is complete and good finishing rains would still be very welcome in many areas.”