GNC - Graincorp Limited

[sptrawler]

CBH may jump the gun on graincorps biofuel plans.

CBH gatecrashes GrainCorp’s biofuels strategy, closes in on BP deal

CBH Group, the country’s largest co-operative, is preparing to derail GrainCorp’s ambitions of becoming a major biofuel player, closing in on a partnership with BP that would involve building its own large-scale oilseed crushing plant in Perth. The move would also stymie GrainCorp’s push to...

acapmag.com.au

 

[JohnDe]

As expected -

GrainCorp predicts sharp earnings drop​

Agribusiness giant GrainCorp has cut full year expectations as softer operating conditions and outlook leading into the second half add to its massive profit fall in the first half.

In its trading update for the six months ended March 31 on Monday – ahead of its results on May 16 – the group says first half underlying profit after tax will be $57m, compared to the $200m result in the prior corresponding period.

First-half underlying earnings before interest, taxes, depreciation and amortisation will be $164m, it expects, lower than the $383m pcp result.

GrainCorp chief executive Robert Spurway says the result "displays resilience" as grain and oilseed markets normalise following three outstanding years for the industry.

"As expected, we have experienced a decline in overall volumes handled across East Coast Australia (ECA) and lower end-to-end supply chain and crush margins relative to 1H23." Strong volumes in Southern NSW and Victoria were offset by below average conditions in Queensland and Northern NSW.

Weaker than expected margins and volumes in April are leading GrainCorp to predict lower full year underlying EBITDA in the range of $250-280m, down from the previous guidance of $270-310m, and compared to its FY23 result of $565m. FY24 underlying NPAT is expected at $60-80m, a fall from the previously expected range of $65-95m and a sharp decline on the $200m result in FY23. Shares last at $8.41.

I travel through rural farming districts quite a lot and have noted that the grain stock has not moved as fast as previous years. I wouldn't be surprised if a lot of it is damaged due to poor storage and is now allocated as feed stock.

The Ukraine Russia war does not seem to have affected the worlds grain supply.

 

[divs4ever]

As expected -



I travel through rural farming districts quite a lot and have noted that the grain stock has not moved as fast as previous years. I wouldn't be surprised if a lot of it is damaged due to poor storage and is now allocated as feed stock.

The Ukraine Russia war does not seem to have affected the worlds grain supply.

will be looking for sub $6.50 before i will be tempted to add ( close to $6 would be very tempting )

but just nibbling away .. the truck is still locked in the shed

 

[JohnDe]

Not sure why today's SP rise, especially with the sea of red around it in today's market. Maybe spending $500m on biofuel equipment is something to look forward to -

Biofuels battle: GrainCorp puts $500m-plus price tag on oilseed plant

GrainCorp says it will cost the company more than $500 million to build a new large-scale oilseed crushing plant as it jostles with Cargill and giant West Australian farming co-operative CBH to become a big player in biofuels.

The company’s chief executive Robert Spurway revealed the price tag on Wednesday, saying he was concerned that market speculation around the cost was too low.

“We wanted to make sure that the market understood the scale of the opportunity that we envisage in this space in terms of capital that we could deploy,” he said.

“And then it follows that the returns associated with that [investment] are probably higher than the market was expecting as well.”

GrainCorp said it was still eyeing sites in WA for the plant despite Cargill moving first to secure prime land for a crushing operation next to a rail line and the CBH Kwinana grain terminal south of Perth.

Mr Spurway said a final decision would be based on supply of canola and other factors, with sites in the eastern states also in contention.

The company’s existing processing assets, including a small plant in WA, crushed a record 282,000 tonnes of canola seed in the six months to March 31.

GrainCorp reported first-half underlying earnings before interest, tax, depreciation and amortisation of $164 million, down from $383 million for the same time last year, and underlying profit of $57 million. The results were in line with downgraded guidance issued by the company 10 days ago and reflect a steep fall in farm production following some of the bigger grain harvests in Australia’s history.

GrainCorp declared an interim dividend of 24¢ fully franked and said it would push ahead with a $50 million share buyback in the next few weeks.

Mr Spurway said farmers in Queensland, NSW and Victoria were on track to produce well above average crops this winter in a potential boost for GrainCorp, but cautioned that would depend on rainfall over the next few months.

“The soil moisture profile across the east coast of Australia is very full and that provides the potential for a full planning area and the opportunity for well above average crops,” he said. “We are seeing an expectation therefore that the east coast crop in northern regions will rebound from the drought conditions we saw in 2023-24.”

Mr Spurway noted that Australia was now on La Niña watch, a weather pattern that in the past has favoured east coast grain production.

HMC Capital, which has taken several activist positions in ASX-listed companies in the last year, emerged as a significant shareholder on the GrainCorp register last month, saying there may be ways to get better value from the company’s seven port terminals through increased utilisation or ultimately a structural separation.

Mr Spurway said GrainCorp had met with HMC and would talk to them and other shareholders again following the mid-year results. “HMC have been very clear. They see future value in GrainCorp based on the value of our strategic assets, the strength of our balance sheet and the exposure that we’ve got to the biofuel feedstock space,” he said.

GrainCorp intends to build a new crushing plant with a capacity of 750,000 to one million tonnes a year and is buoyed by support for the biofuels sector announced in the budget on Tuesday.

BP, which has flagged converting a former oil import terminal at Kwinana into a biofuel production hub, also welcomed budget support which includes adding biofuels to the Future Made in Australia package.

ASX-listed Nufarm, which has an offtake and market development deal with BP around oilseeds, said the budget move was a win for farmers.

Mr Spurway would not comment on whether Cargill’s tie-up with CBH, Australia’s biggest co-operative and dominant west coast grain exporter, had put GrainCorp on the back foot in WA. “It is not at all surprising to see broad interest in this space. I think it highlights the scale of the opportunity we’re seeing and the likely capacity that will be required over time in Australia,” he said.

WA farmers typically produce most of Australia’s canola for oilseed crushing, but there are doubts about the size of the next crop after a bone-dry start to the year.

 

[BossMan.]

Bloomberg - Are you a robot?

 

[divs4ever]

GrainCorp provides FY25 earnings guidance and announces up to $50 million share buy-back

GrainCorp Limited (GrainCorp or the Company) (ASX: GNC) today announces it expects to report FY25 Underlying EBITDA1in the range of $270-320 million (FY24: $268 million) and FY25 Underlying NPAT2 of $60-95 million (FY24:$77 million).
Earnings guidance excludes Business Transformation costs3, and is subject to a range of market variables,as outlined at the conclusion of this announcement.
Operating update
Managing Director and CEO Robert Spurway said that, despite varying growing conditions between northern and southern regions, overall East Coast Australia (ECA) production has been strong, with ABARES currently estimating a2024-25 ECA winter crop of 30.0mmt.4
“The winter crop harvest got off to an early start in Queensland and Northern NSW, and it was pleasing to see several of GrainCorp’s sites in those regions achieve new grain receival records.“
However, conditions were more challenging in southern regions, with the Victorian crop in particular down on recent seasons.
”GrainCorp’s receivals year-to-date total 11.9mmt5(February 2024: 8.5mmt6) and were supported by an opening carry in position of 2.5mmt.7
Prospects for the summer crop are encouraging, with ABARES forecasting an ECA sorghum crop of 2.1mmt8.
Although down on the prior season, production remains above the historical average.
We expect FY25 receivals of 13.0-14.0mmt (FY24: 10.1mmt), reflecting a year-on-year increase in ECA grain production,” Mr Spurway said.
"We expect that higher receivals will support an FY25 export program of 6.5-7.5mmt9(FY24: 5.6mmt). We expect margins to be compressed by strong supply of grains and oilseeds globally and lower demand.
“In our Nutrition and Energy businesses, we are expecting to continue achieving strong oilseed crush volumes as were main focused on optimising the performance of our processing facilities.
Average crush margins in FY25 are expected to moderate from FY24 levels, following a below average Victorian canola crop and lower global oil and meal prices.1
Underlying EBITDA is a non-IFRS measure representing earnings before interest, tax, depreciation and amortisation, excluding Business Transformation costs2
Underlying NPAT is a non‑IFRS measure representing statutory net profit after tax, excluding Business Transformation costs after tax3
These are costs relating to GrainCorp’s Business Transformation Program, as outlined on slide 16 of the ‘FY24 Results’ presentation that GrainCorp released to the ASX on 16 November 20244 ABARES Crop Report – December 20245 Grain received up-country and direct-to-port from 1 October 2024 to 13 February 20256
Grain received up-country and direct-to-port from 1 October 2023 to 14 February 20247 GrainCorp carry-in on 1 October 20248 ABARES Crop Report – December 20249 Grain exports include bulk and container exports
“Despite current oilseed margin pressures, we expect sales volumes across our Nutrition and Energy segment to remain strong.”Mr Spurway noted the recent uncertainty in global trade policies:
“GrainCorp is closely monitoring market developments and policy changes globally.
Our strategic asset base and balance sheet strength positions us well to manage potential risks and capitalise on opportunities in a shifting global trade landscape.
”StrategyIn relation to ongoing key strategic initiatives, Mr Spurway noted:“We continue to progress key initiatives that support earnings diversification and resilience of the business.
“Our bulk materials program remains an ongoing focus, as we increase the utilisation and the margin profile for non-grain products at our port sites.
We anticipate another strong earnings contribution in FY25.
“Along with our MOU partners Ampol and IFM investors, we continue to progress the feasibility assessment of a renewable fuels facility, and to explore the supply of homegrown feedstocks.“
A sustainable domestic industry requires a reliable, locally-sourced feedstock supply chain and we are working closely with government and industry partners with the aim of putting the right conditions in place.
"We believe the long-term fundamentals of this potential new market remain compelling and will generate significant economic value for Australia, creating opportunities for growers and industries involved in renewable energy production.“
We are progressing well with the implementation of the first wave of our Business Transformation program, which will reduce complexity and improve efficiency across our business.
"Capital management
GrainCorp also today announced its intention to conduct an on-market share buy-back of up to $50 million.
“The share buy-back reflects the strength of our balance sheet and delivers on our ongoing commitment to continue generating returns for shareholders through the cycle.“
The capital discipline GrainCorp has demonstrated over several years allows us to both return capital and to continue assessing earnings-accretive organic and inorganic growth opportunities to improve GrainCorp’s earnings resilienceover time,”
Mr Spurway said.Earnings guidance factors GrainCorp’s FY25 guidance remains subject to a range of variables, including:
• Second half grain volumes, including sorghum receivals;
• Timing and volume of grain exports;
• Supply chain margins;• Oilseed crush margins; and
• New season opportunities in Q4.
The GrainCorp Annual General Meeting for FY24 will be held on 13 February 2025 at 10am AEDT in Sydney.

This announcement was authorised for release to the ASX by the GrainCorp Limited Board.

i hold GNC

 

[divs4ever]

i hold GNC

and have a ( cheap ) buy order in the market

looks like that order will remain in the market a while longer

 

[Dona Ferentes]

"Summer rainfall has built a healthy soil moisture profile in Queensland and Northern NSW once again, supporting a strong planting window and creating the potential for an above-average crop.

"In contrast, parts of Victoria and Southern NSW have received below-average rainfall, creating a more variable outlook for cropping conditions. Autumn and winter rain will be important for growers."
- Robert Spurway, CEO

 

[Dona Ferentes]

from 15 May: 1H25 performance
• 1H25 underlying EBITDA of $202m
• Total grain handled of 29.5mmt
• Oilseed crush volumes of 283kmt
• FY25 earnings guidance upgraded
- Underlying EBITDA of $285-325m
- Underlying NPAT of $65-95m

• Balance sheet remains strong; $296m core cash
• Declared total interim dividend of 24cps
• Increased on-market buy-back from $50m to $75m; currently completed $15m

GrainCorp’s upgraded FY25 earnings guidance remains subject to a range of variables, including:
• Second half grain volumes;
• Timing and volume of grain exports;
• Supply chain margins;
• Oilseed crush margins; and
• New season opportunities in Q4.

.

... as you'd expect, there are a lot of variables in the mix,
.
I noticed in a recent report Mirrabooka has been adding to their GNC position over the last few months.