December 3, 2007

Drought hurts annual profit of Australia's GrainCorp

The severe dry spell that hit Australia has also hurt the annual profit of agribusiness firm GrainCorp's for fiscal 2007 by 162.3 percent, as the company expects to incur more losses this year.

The drought saw grain volumes fell greatly by 79 percent to 2.3 million tonnes, from 10.8 million tonnes in 2005/06. Grain exports were also reduced by drought, with one million tonnes shipped compared with 5.3 million tonnes in the prior year.

GrainCorp managing director Tom Keene said grain prices had nearly doubled from a year ago and were anticipated to remain strong as demand outstripped supply. But tough seasonal conditions were seen to book another loss for the company this year.

The 2007/08 season would be similar to 2006/07, with forecast total receivables of three to four million tonnes.

Stocks of grain remained at record low levels, and the company was carrying 1.2 million to 1.3 million tonnes into fiscal 2008, compared with 4.9 million tonnes in the prior year.