GrainCorp has reported earnings for the first half year (h1) of 2014 of AUD$166 million (€112 million) compared to AUD$227 million (€153 million) for the same period in 2013.
The company also reported a net profit of AUD$61 million (€41 million) down 44% on 2013 results of AUD$109 million (€73 million). The statutory net profit of $50 million includes significant items relating to the network optimisation project within GrainCorp Oils.
GrainCorp Executive Chairman and Interim CEO Don Taylor said that the malt and oil sectors delivered consistent results but earnings were down in storage and logistics due to a smaller crop in northern regions. Increased local demand also cut the amount of grain available for export.
According to Taylor reduced earnings were to be expected in a tough year, and he’s predicting the second half year will also be challenging, but maintains the company is on track to record a full-year underlying profit of $80 to $100 million (€54-€67 million).
However Taylor says outlook for the current growing season is positive: “Looking further ahead, some good pre-planting rains have been recorded in many areas of our catchment with canola planting substantially underway in many areas and good starts for wheat and barley. However, it’s a long season and, as always, favourable conditions and good finishing rains will be critical to the delivery of a good crop in eastern Australia.”
One hundred local silos will close as part of the network review, which Taylor said will be finalised before the next harvest.
He also said that the company was close to announcing a new CEO to replace Alison Watkins who left GrainCorp earlier this year.
When asked if American company Archer Daniels Midland (ADM), whose takeover bid was blocked by treasurer Joe Hockey late last year, was still interested, he had no comment.