- GrainCorp (GNC) has released a stellar earnings guidance for the 2021 financial year, expecting to more-than-double its earnings on the year before
- The agriculture giant is expecting to make between $230 million and $270 million in earnings for the financial year
- This is expected to translate to net profit after tax of between $60 million and $85 million
- For reference, GrainCorp made $108 million in earnings over the 2020 financial year and posted an annual loss after tax of $16 million
- Managing Director and CEO Robert Spurway says the strong FY21 outlook reflects a major turnaround in cropping conditions across Australia’s east coast
- After major droughts from 2017 to the end of 2019, the company has finally climbed out of its rut with its major 2020 crop
- GrainCorp is now able to focus on its current export program, with 1.7 million tonnes of product having been shipped since the start of October 2020
- Today’s news has shot GNC shares up to an two-year high, closing higher by 0.86 per cent at $4.71 per share
GrainCorp (GNC) has released a stellar earnings guidance for the 2021 financial year, expecting to more-than-double its earnings on the year before.
The ASX 200-lister is expecting to pull in between $230 million and $270 million in earnings before interest, tax, depreciation and amortisation (EBITDA) for the financial year.
These earnings underpin an expected net profit after tax of between $60 million and $85 million.
For reference, GrainCorp made $108 million in EBITDA over the 2020 financial year and posted an annual loss after tax of $16 million.
It seems GrainCorp has finally escaped a rut brought on by severe droughts from 2017 until the end of 2019.
Managing Director and CEO Robert Spurway said the strong FY21 outlook reflects a major turnaround in cropping conditions across Australia’s east coast.
“We experienced near-optimal conditions across much of eastern Australia during the recent winter cropping season and this has translated into one of the largest crops in recent history,” Robert said.
“Our combined intake across harvest has totalled 13.8 million tonnes of receivals year-to-date, eclipsing the 12.9 million tonnes of receivals at the same stage during the last bumper harvest in 2016/17,” he explained.
Importantly, the company managed the years of drought well to ensure it was well-positioned to optimise its network of assets as soon as rain began to fall once more. According to Robert, this meant the company was able to efficiently manage the much larger crop despite the previous years of dryness.
Looking ahead, GrainCorp is now able to focus on its current export program, which company management says is the first major export program in years. So far, 1.7 million tonnes of product has been shipped since the start of October 2020.
Moreover, the company said its port bookings are nearing capacity through to September 2021.
The sheer scale of the company’s latest harvest is set to benefit the business through to the 2022 financial year thanks to a higher-than-normal level of carry-over grain.
Today’s news has shot GNC shares up to an two-year high, closing higher by 0.86 per cent at $4.71 per share.