GrainCorp crushes record 540,000T of canola amid 70% profit plunge
AUSTRALIA – ASX-listed agribusiness GrainCorp has crushed 540,000 tonnes (t) of canola seed in the 2024 financial year (FY24) ending September 30, up from 496,000t in FY23, despite a challenging financial year marked by lower grain volumes and a sharp drop in earnings.
However, this milestone came against a backdrop of reduced overall performance, with underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) falling to US$268 million, a 53% decline from the previous year’s US$565 million.
Underlying net profit after tax (NPAT) also plummeted by nearly 70%, from US$250 million in FY23 to US$77 million in FY24.
Robert Spurway, GrainCorp Managing Director and CEO attributed the lower earnings to “challenging global market conditions and variable crop production” but highlighted the company’s “discipline in operational performance and effective cost management” in navigating these hurdles.
Total grain handled dropped significantly, with volumes falling to 28 million tonnes (Mt) from 37.4Mt in FY23. Export volumes decreased from 8.3Mt to 5.6Mt, while domestic outloads also declined, slipping from 6.4Mt to 5.9Mt.
On his part, Ian Morrison, the company’s Chief Financial Officer noted that drier conditions in Queensland and northern New South Wales (NSW) contributed to lower production, although above-average conditions in southern NSW and Victoria provided some offset.
Global factors, including softer margins and a slower grower selling pace, further pressured the company’s financial results.
GrainCorp’s agri-energy segment delivered growth, with volumes increasing by 28,000t to 379,000t, driven by strong demand for tallow and used cooking oil.
However, the company announced it would cease manufacturing at its New Zealand East Tamaki food processing plant following a strategic review.
Despite the headwinds, plans to expand its oilseed crushing capacity remain on track.
GrainCorp is evaluating locations on both the east and west coasts for a new facility, with the front-end engineering design (FEED) phase targeted for 2026.
Spurway emphasised the importance of aligning this expansion with industry demand and supportive government policies.
Looking ahead, Spurway expressed optimism about the ongoing winter crop harvest, which has shown “strong volumes” in northern growing regions. GrainCorp reported early year-to-date receivables of 5.8Mt, alongside robust export volumes of 400,000t.
“We expect good receivables as harvest progresses through southern NSW and Victoria,” said Spurway.
He noted, however, that margins for grain and crush operations are likely to remain under pressure due to global competition and smaller expected crops in some regions.
Despite softer market conditions, Spurway highlighted potential for margin improvement as demand increases throughout the financial year. “As the year plays out, inevitably demand will continue to grow,” he said.
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