Australia’s largest grain handler GrainCorp blames takeover costs and a smaller crop for a 31 per cent slump in its full year profit – and warns of tougher conditions ahead.
GrainCorp made a net profit of $141 million for the 12 months to September 30, down from $205 million for the previous year.
Underlying profit, which excludes one-off costs, was down almost 15 per cent to $174.5 million.
The slide came despite a 34 per cent rise in revenue to $4.46 billion, compared to the previous year’s $3.33 billion.
The company on Thursday said the fall was partly due to the cost of responding to a takeover proposal from US grain giant Archer Daniels Midland.
Federal Treasurer Joe Hockey is facing pressure from senior Nationals MPs to block the proposed takeover.
GrainCorp said costs relating to its entry into the edible oils business through the purchase of the Gardner Smith Group and Goodman Fielder’s oils business had also contributed to the profit fall.
Meanwhile, the eastern Australian crop was approximately 17 per cent smaller than in the previous year, which led to reduced grain exports.
GrainCorp chief executive Alison Watkins warned that the next 12 months would be tougher for the company, with many of its growers facing worse conditions.
“Drought conditions in Queensland and Northern NSW have negatively impacted yields in those regions, while recent frosts have affected many areas further south,” Ms Watkins said.
“After a couple of big years, GrainCorp’s storage and logistics network must be well prepared for the much tougher period ahead.”
GrainCorp announced a fully-franked final dividend of 20 cents per share, which takes the annual dividend to 45 cents, including an interim special dividen of five cents.