In its Half Year Results released on Thursday, Graincorp (ASX:GNC) reported a 39.6 per cent drop in profits. Net profit for the half-year period ending on 31 March 2015 came in at $30.2m, a 39.6 per cent decrease compared to the previous corresponding period. In the same period, revenue was down 3.9 per cent to $1,975.1m. The company is reporting a fully franked interim dividend of 7.5c, up 2.5c from the previous period. Net tangible assets per share came in at $5.63 per share, up 2.7 per cent.
The agriculture company cited lower grain production and prices for the drop in profits. Earlier in the year, Graincorp announced that its full-year underlying profit would be between $45m and $60m, down from the $95m of the previous year. In the earlier report, the company cited falling grain prices and inhibited crop growth during the winter. In Thursday’s announcement, the company reaffirmed its lower full-year profit guidance. It also announced that it had refinanced and extended several existing term debt facilities with both Australian and international banking groups.
Managing Director Mark Palmquist discussed the strong performance by both Graincorp Malt and Graincorp Oils, which help to offset the lower profits. “Plantings are well advanced in many growing areas, however progress has slowed substantially and further rain is needed across the grain belt to complete planting and help crops establish," he said. "Generally, conditions are looking more favourable in the eastern half of the eastern Australian grain belt; areas further inland remain very dry.” Shares of the company have fallen 25c, or 2.47 per cent, at $9.86 per share around 1:11pm on Thursday. GNC has advanced 10.41 per cent in the last 12 months and 19.52 per cent so far this year.
Author: Simon Herrmann
May 14, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.