Graincorp shares fall after cut to profit guidance
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More news: Shares in Graincorp tumbled 4% to $8.08 in early trading on the ASX after the bulk grains handler cut its full-year earnings and profit guidance again as operating conditions softened in the second half.
RBA Capital Markets analyst said they were surprised by the miss as earnings were below consensus and retained its 'underperform' rating for the stock.
What they said: "Honestly we were surprised by the 1H24 miss, given Graincorp has historically taken a conservative approach to its guidance and recent rains and market commentary have suggested a more positive near-term contribution may have been forthcoming," they said.
"The market had been advancing ahead of Graincorp's 1H25 result we believe assuming a FY24 guidance upgrade was coming and management would provide positive initial views on the FY25 winter harvest which is 'planting' at present."
Graincorp cuts FY guidance as conditions soften
The news: Bulk grains handler GrainCorp has cut its full-year earnings and profit guidance again as operating conditions soften in the second half.
The numbers: The agribusiness reported preliminary first-half profit of $57 million, down from $200 million a year ago, and underlying earnings of $164 million, down from $383 million. It will detail the first-half results on 16 May.
Full-year earnings are now expected to be in the range of $60 million to $80 million, down from its previous estimate of $65 million to $95 million, while earnings are expected to be $250 million to $280 million, down from $270 to $310 million.
Graincorp shares last closed at $8.41 and over the past 12 months has risen 20.14%.
The context: Graincorp initially cut its guidance in February, attributing it to crop growing conditions on Australia's east coast normalising from historically high levels seen over the last few years.
On Monday, it said margins and volumes have dropped further in the second half, on the back of lower grain handling margins, lower commodity prices, drier than expected conditions in Western Australia reducing grain production and unplanned equipment maintenance.
The source: ASX announcement
