GrainCorp's 2011 net profit after taxes up 114% year-over-year to AU$172M, driven by large eastern Australia grain harvest, higher grain marketing earnings, solid contribution from international, domestic malt sales

SYDNEY , November 23, 2011 (press release) – GrainCorp today released its financial results for the year ended 30 September 2011, recording a 114% increase in net profit after tax (NPAT) to $172 million.

The result was driven by grain receipts from the large 2010/11 eastern Australian grain harvest, a large export programme, higher grain marketing earnings, and another solid contribution from international and domestic malt sales.

GrainCorp also declared a fully franked final dividend of $0.15 per share, and a fully franked special dividend of $0.20 per share, taking 2011 fully franked dividends to $0.55 per share.

The ‘ex’ date for the final and special dividends will be 1 December 2011. The record date will be 7 December 2011 and the proposed payment date is 21 December 2011.

2011 Highlights

  • EBITDA 65% higher to $350M (2010 $212M)
  • NPAT 114% higher to $172M (2010 $80M)
  • Full year dividends of $0.55 per share (2010 $0.30)
  • Grain receival 101% higher to 14.9mmt (2010 7.4mmt)  Grain exports handled 131% higher to 8.1mmt (2010 3.5mmt)
  • Malt performance in line with expectations including sales of 1.1mmt
  • Low gearing and strong free cash flow

GrainCorp CEO, Ms Alison Watkins said, “The result is very pleasing given that the 2010/11 harvest was one of the most challenging in the company’s history, with record rainfall received across much of our network leading up to and during harvest.

“The geographic spread and flexibility of our assets, the capability of our people and the strategic investments we made in additional storage and logistics capability, allowed us to successfully manage the large and complex task of receiving 14.9 million tonnes of grain at our country sites, and handle 8.1 million tonnes of grain through our port elevators.

“GrainCorp’s grain marketing business also contributed strongly to the result, validating our strategy to integrate grain handling, processing and marketing activities.”

“GrainCorp has expanded its wheat, barley, canola, sorghum and pulse exports to more than 90 customers across 25 countries. While we have grown our export business, we continue to focus closely on the domestic market, and during the year, we restructured and refocused our domestic marketing team to increase the support we provide to our important domestic customers,” Ms Watkins said.

On the contribution of malt production to the result, Ms Watkins said, “Domestic and international malt production made a pleasing contribution to the overall result, despite soft beer demand and the impact of the strong Australian and Canadian dollars on export competitiveness.”

Outlook

“We have received 5.2 million tonnes of wheat, barley, canola, and pulses so far this season. The quality of grain harvested is higher than last year due to the drier lead up to harvest”, Ms Watkins said.

“Harvesting in Queensland is almost complete and conditions there were certainly much improved on last year. In NSW and Victoria, the season holds a lot of promise. Production, while not as high as last year, is forecast to be above average. All industry participants are hoping that harvest can continue uninterrupted by widespread extreme weather.”
On the outlook for earnings from malt production, Ms Watkins said, “There will be continued pressure on earnings in the current year. Consumer spending on beverage consumption in mature beer markets continues to be flat due to the overall economic climate.

“Demand for beer in Asian, African and South American countries continues to drive world malt demand growth in the medium term, and our recent acquisitions in Western Australia (Kirin Australia) and Germany (Schill Malz) position us well to service these growing malt consuming regions.”

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