GrainCorp's Preliminary 1H24 Results and Outlook Update

GrainCorp Limited (ASX: $GNC) has released its preliminary 1H24 results, expecting to report underlying EBITDA of $164 million and underlying Net Profit After Tax of $57 million, both lower than the previous year's figures. The company's Managing Director & CEO, Robert Spurway, commented on the results and highlighted the challenges faced in different regions. The 1H24 result will be published on Thursday, 16 May 2024.

Executive Commentary on 1H24 Results and Outlook

GrainCorp's preliminary 1H24 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 have been offset by below average conditions in Queensland and Northern NSW. Despite 1H24 results being largely in line with expectations, operating conditions and outlook leading into 2H24 have softened, evidenced by weaker than expected margins and volumes in April 2024.

Summary of GrainCorp's Preliminary 1H24 Results and FY24 Outlook

GrainCorp expects to report lower 1H24 underlying EBITDA and NPAT compared to the previous year, reflecting challenges in different regions and softer operating conditions leading into 2H24. The company has updated its FY24 earnings guidance, expecting underlying EBITDA in the range of $250-280 million and underlying NPAT of $60-80 million. The updated guidance reflects continued softness in end-to-end grain handling margins, drier than expected conditions in Western Australia, and costs associated with operational downtime at one of its food manufacturing sites. Despite these challenges, GrainCorp remains focused on driving value from its integrated supply chain and diversifying the business through various initiatives. The company's FY24 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.