Australian commodity storage and logistics group GrainCorp [ASX:GNC] has shared its results for the first half of FY2023 ended 31 March.
The group also upped its guidance for FY2023.
As a result, GNC was rising by more than 4% in share price by the mid-morning, worth $7.40 a share.
However, it’s still trending 29% down in the past 12 months, and 35% down in the wider market:
Source: TradingView
GrainCorp’s strong results in 1H2023 inspire guidance upgrade
GrainCorp revealed that it had reached $383 million in EBITDA (earnings before interest, tax, depreciation and amortisation), lower that the first half of 2022, and NPAT (net profit after tax) $46 million less than 1H2022.
This related to $200 million in NPAT, down again on the $246 million GNC made in profit the same time last year.
While lower year-on-year, these results were still considered strong and ended up bringing out a ROIC (Return on Invested Capital) of 22.7%.
GainCorp said its core business has strengthened in the half (increasing output and assets) with oilseed crush volumes up 10% on 1H2022, and bulk material volumes (like woodchips and cottonseed) up 15%.
Due to the strength in the results, GNC ended up upgrading its FY23 EBITDA guidance from the range of $470 million–$530 million, to $500–$560 million.
It also upgraded its NPAT from $180 million–$220 million to NPAT of $220–$260 million.
GrainCorp also announced a fully franked dividend of 24 cents a share — the same as last year. This was made up of an interim dividend of 14 cents a share and a special dividend of 10 cents a share.
GrainCorp CEO Robert Spurway commented:
‘Both our business segments — agribusiness and processing — contributed to the strong performance, with outstanding operational execution and solid supply chain margins.
‘We saw good ongoing demand for Australian grain and oilseeds, and this was supported by a third bumper crop in east coast Australia (ECA).
‘We are benefiting from our extensive asset footprint and the operational capability of our teams.
‘GrainCorp’s export program ran at close to full capacity with 4.4mmt of grain and oilseeds exported during the half. Export supply chain margins remained solid, albeit not at the levels we experienced last year.’
GrainCorp’s balance sheet strengthened further during the half with a core cash balance of $200 million on 31 March 2023, up from $129m core cash in 1H2022.
The group’s working capital also remained elevated thanks to a strong export program and high commodity prices, yet GNC says this is expected to normalise as prices and exports unwind.
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