GrainCorp announces US$250M net profit for FY23, down 34% from previous year

GrainCorp announces US$250M net profit for FY23, down 34% from previous year

USA – GrainCorp Limited, a renowned grain elevator, reported a net profit after tax of US$250 million for the financial year ending September 30, marking a 34% decline from the previous year’s results. 

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also saw a decrease, falling from US$703 million in FY22 to US$565 million in FY23.

The reduction in profit is attributed to a slight decrease in grain movements, with the total grain handled in FY23 reaching 37.4 million tonnes (Mt), down 10% from the FY22 total of 41.1 Mt. Grain exports was also lower at 8.3Mt, compared to 9.2Mt in FY22.

Robert Spurway, GrainCorp’s managing director and CEO, acknowledged the challenging conditions but highlighted that the company’s disciplined focus on operational performance, along with the capability of its people, contributed to a positive performance in FY23. 

He noted that despite volumes and margins being down from the record levels seen in FY22, they remained above historical averages.

Record crush volumes boost processing segment

A notable highlight in GrainCorp’s results was the processing segment’s record crush volumes and margins, with EBITDA up almost 20%. 

Spurway attributed the exceptional result to the oilseeds business, supported by disciplined investment and advanced analytics, resulting in record crush volumes of nearly 500,000 tonnes.

Favorable oilseed margins were buoyed by a substantial eastern Australian canola crop, sustained global demand for vegetable oils, and supply constraints in key growing regions. 

Spurway highlighted that bakery, dairy, and animal protein producers are expected to be the biggest beneficiaries of this growth.

Looking ahead, GrainCorp is actively exploring opportunities for expanding its oilseed crush capacity, with Western Australia identified as the preferred location for a new plant. The assessment includes a new plant with an approximate capacity of 750,000-1 million tonnes.

GrainCorp recently acquired animal nutrition company XF Australia (XFA), trading as Performance Feeds and Nutrition Services Associates, for US$35 million. 

Spurway expressed excitement about expanding the company’s Animal Nutrition offering, emphasizing the acquisition’s alignment with GrainCorp’s strategy of disciplined growth in targeted business areas.

Additionally, GrainCorp also recently announced a renewable fuels initiative with IFM Investors to explore opportunities to help decarbonize the aviation sector. The feasibility studies will focus on sustainable fuel production in Australia, including long-term domestic feedstock supply from waste, residues, crop-based oils, and bio-organics.

Spurway sees this as a significant opportunity for the Australian agriculture industry, stating, “The need for sustainable aviation fuel continues to grow, and here in Australia, we have a significant opportunity to be at the forefront of global feedstock and renewable fuel supply.”

The feasibility initiative will assess long-term feedstock supply, market locations, sustainable farming practices, and the potential for a major sustainable fuels production industry in Australia, including a feasibility study for a sustainable aviation fuel (SAF) facility capable of producing 720,000 tonnes of renewable fuels annually.

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