GrainCorp shares rise on dividend, outlook
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More news: Shares in GrainCorp are up nearly 4% to $8.39 after the bulk grains and oilseeds handler kept its dividend unchanged at 24 cents a share including a 10 cents special dividend, despite a sharp fall in half-year profit.
Markets also cheered an optimistic outlook, with the company indicating a strong planting period for the 2024/25 winter crop on the East Coast.
RBC Capital Markets analyst Owen Birrell, who has an 'underperform' rating on the stock said the outlook for solid 2025 planting is "constructive", while UBS analysts, who have a 'buy' rating on the stock said dividends had beat expectations.
Weather, prices weigh on GrainCorp first half results
The news: GrainCorp has posted a sharp drop in half-year profit and sales on the back of lower production in Queensland and Northern NSW and price declines in the global grain market.
The numbers: The bulk grains handler reported profit of $49.6 million for the six months to March 2024, down 75.2% from a year ago, while sales tumbled 25.5% to $3.38 billion. Underlying profit fell to $57 million from $200 million a year ago.
Despite this, it will pay a dividend of 24 cents a share including 10 cents special dividend, unchanged from a year ago.
Its share price last closed at $8.07 and over the last 12 months has dropped 0.12%.
The context: GrainCorp CEO Robert Spurway said the grain and oilseed markets were normalising after three "extraordinary years for the industry", with a decline in overall production across the East Coast and lower supply chain and crush margins. Strong volumes in Southern NSW and Victoria were offset by below average conditions in Queensland and Northern NSW, he said.
The agribusiness last week flagged a lower full-year guidance amid softer conditions in the second half, with full year underlying profit now expected to be in the range of $60 million to $80 million, down from its previous estimate of $65 million to $95 million.
Spurway said early indications for the 2024/25 winter crop were showing recent rainfall and a healthy soil moisture profile had supported a strong planting period in the East Coast, with northern regions set to rebound from 2023/24.
The source: ASX announcement
