(AFP) Graincorp raised its annual profit projection for the second time, capitalizing on high demand for grains and vegetable oils amid a supply bottleneck from the Ukraine war. Its shares rose more than 10%.
Profits were also helped by the fact that the East Coast of Australia (ECA) was expected to have an above-average harvest in 2022/23 and that the three-month rainfall forecast was good.
Global wheat prices reached record heights in early 2022 as Ukraine’s supply was cut off by Russia’s invasion, boosting Graincorp’s first-half profit and allowing them to offer a special dividend.
Australia, the world’s sixth-largest wheat exporter, is the top alternative for customers wanting to replace Russian and Ukrainian cargoes, and will ship a record volume this year.
The business estimates fiscal 2022 net profit after tax of A$365 million to A$400 million, up from A$310 million to A$370 million.
Its shares rose 10.3% to A$8.43, but pared gains to trade 6.3% higher at 0122 GMT.
“This good forecast is boosting activity in the fourth quarter, export volumes, forward grain sales, and the profitability of the supply chain,” said CEO Robert Spurway.
Graincorp said its farming and processing divisions will achieve record financial performance. Its supply networks are working near full capacity to export grains.
“Investors have welcomed the positive forward guidance. The company feels demand for their products is high despite the macro background, “CMC Markets’ Azeem Sheriff.
The company is buying bunker storage and handling equipment to increase the amount of money it can get at key network nodes.
($1 = $1.4364)
