News

Multi-million dollar loss

By Southern Riverina News

Grain production in the local district is ‘‘the lowest in over a decade’’ according to GrainCorp, which recently announced a statutory net loss after tax of $59 million in its half year 2019 financial results.

The financial position of the company at the same time last year, for half year 2018, was a net profit after tax of $36 million.

The company said grain deliveries to its Deniliquin receival facility were down almost 70 per cent year-on-year, and by more than 80 per cent year-on-year at Tocumwal.

Within days of GrainCorp’s financial results being released, it was announced that Australia would import foreign-grown grain for the first time since 2007.

The Department of Agriculture approved a permit to import bulk wheat from Canada, to be processed by Manildra Group at Nowra.

GrainCorp CEO Mark Palmquist said the company’s results reflect a ‘‘particularly challenging period in grains and oilseeds’’.

He said the severe drought conditions in eastern Australia has played a significant part in the result, as well as grain flows being disrupted by grain trade conditions.

‘‘East coast Australian grain production was the lowest in over a decade and this has had a significant unfavourable impact on both our grains and oilseeds businesses,’’ Mr Palmquist said.

‘‘There was continued positive performance from our malt, feeds and bulk liquid terminals operations. Our foods business also continued to achieve ongoing efficiency improvements.

‘‘GrainCorp recorded encouraging improvements in the group’s two key safety measures, although we are determined to pursue further improvement.’’

Adding to the CEO’s message, a company spokesperson said ‘‘we have seen many droughts before over our 100 year history and are well accustomed to responding to them’’.

‘‘GrainCorp has a flexible network and workforce that changes to reflect the expected size of the crop season to season,’’ the spokesperson said.

‘‘As a consequence, the number of harvest casuals taken last year was significantly lower to reflect the season. Both Deniliquin and Tocumwal are very important sites for us.’’

The spokesperson said while a zero general security allocation in the Murray Valley has contributed to a downturn in agriculture this season, it is not necessarily linked to the reduction in grain delivered to GrainCorp as the crop is ‘‘broadacre and generally dryland’’.

As a result of the half-year financial performance, the Board has determined that GrainCorp will not pay an interim dividend this period.

Looking ahead, GrainCorp expects continued robust demand for malt products in the 2019 northern hemisphere summer and further benefits to be derived from the continuous improvement program in foods during the second half.

It says planting for the winter grain crop is well underway in eastern Australia, however it is too early in the season to forecast grain production levels and the potential implications for GrainCorp.