GrainCorp declares total fully-franked interim dividend of 24cps following record half-year

To reflect excellent performance across all business areas and resilience within its supply chain, GrainCorp (ASX: GNC) has within its record half-year result this morning declared an interim fully franked special dividend of 12cps in addition to increasing its interim fully franked ordinary dividend to 12cps from 10cps.

Management attributed reported earnings (EBITDA) of $427m for the half-year ended March 31, up from $140m in the previous period to elevated global demand for Australian grain, oilseeds, and vegetable oils, after two consecutive bumper crops in east coast Australia (ECA) amid a period of tight global supply.

Management also notes war in Ukraine, resulting in Black Sea trade disruptions – which prompted buyers to seek alternative sources of supply – has also had a material impact on demand for Australian commodities.

Highlights with today’s half-year result were:

• Net profit $246m (HY21: $51m)

• Agribusiness earnings up 200% to $376m

• Processing earnings up 192% to $70m

• Core cash balance of $129m at 31 March 2022

• Net debt on 31 March 2022 was $2.0bn (HY21: $1.4bn)

Management also confirmed FY22 guidance of underlying earnings $590-$670m, and underlying net profit of $310-$370m.

Perfect storm

Commenting on today’s record result, CEO Robert Spurway highlighted the confluence of highly favourable conditions right across the business.

“GrainCorp is in a strong position to maximise opportunities through the current cycle, while also progressing our strategic initiatives in our core, growth and ESG areas, Spurway noted.

"Planning is well underway for additional investment in the lead-up to the 2022-23 harvest to efficiently manage the volumes to be delivered by growers.”

Looking forward

In short, management sees no letup in significant ongoing global demand for Australian grain and oilseeds and highlighted favourable planting conditions.

“Recent weather patterns and continued La Niña conditions have provided excellent planting conditions for the 2022-23 winter crop to date, building confidence in grain supplies from ECA and further supporting export sales and supply chain margins,” Spurway said.

The group has also launched GrainCorp Ventures, a $30m corporate venture capital fund to invest in AgTech start-ups, to build long term sustainable growth in the Australian agriculture industry.

GrainCorp's shares were down -2.94% an hour out from the open to $10.25 having opened at $10.71.

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