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GrainCorp shares jumped nearly 8% after the Australian crop handler unveiled a 66% jump in earnings, raised its profits outlook and flagged upbeat prospects heading even into 2013.
The Sydney-based group reported profits of Aus$88m for the October-to-March half, up from Aus$53m a year before, boosted by the record harvest in its eastern Australian fiefdom.
The company's grain receivals doubled to 14.4m tonnes.
"It's a big year for a volume-based business like ours. Our grains businesses are having an unprecedented year," Alison Watkins, the GrainCorp chief executive said.
The grain marketing division reported earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled, to Aus$35m, with the ports unit seeing ebitda jump 160% to Aus$55m.
Exports jump
And GrainCorp forecast good times ahead, raising its outlook for earnings for the full year to the end of September to Aus$145m-165m, from Aus$115m-135m.
Analysts have factored in full-year earnings of Aus$132m.
"Second-half earnings from grain handling will be supported by the significant carry forward of grain in our country elevators. This means earnings from storage will be higher than the previous half year," Ms Watkins said.
The group also edged higher to 7m-8m tonnes, from 6.5m-7.5m tonnes, its forecast for export volumes, which doubled to 3.2m tonnes in the first half.
Another strong harvest?
Prospects looked better for 2011-12 financial year too, given that GrainCorp expects to begin it with carryover stocks of an "above average" 6m tonnes of grain, compared with the 2.6m tonnes with which it started the current financial year.
The group forecast "busy storage, and logistics and export programmes" for 2011-12, boosted also by the prospect of "positive crop volume" from Australia's next harvest too.
GrainCorp quoted Australian Crop Forecasters data forecasting an eastern Australian barley and canola crop of 19.0m tonnes, compared with some 22m tonnes from the last harvest, but nonetheless a historically strong result.
The forecast assumes sowings rising 8% to 9.5m hectares, but yields dropping 20% to 2.0 tonnes per hectare from last time, when plentiful rains boosted crops.
GrainCorp said that the crop volumes it was left with as of the beginning of its 2012-13 financial year were "likely" to prove "above long-term average" levels.
Malt decline
The data did reveal a 3.4% decline to Aus$ 57m in ebitda at the malt business, blamed on an "unfavourable" exchange rate, following the appreciation in the dollar to its highest for nearly 30 years against the US dollar.
"Consolidation in the global brewing industry is giving brewers additional bargaining power with suppliers," Ms Watkins added.
The first half results were also swollen by a $40.4m gain from marking derivatives to market prices, a windfall the group expects to realise in the second half of its financial year.
Nonetheless, GrainCorp shares closed up Aus$0.62 at Aus$8.38.
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Source: Agrimoney.com