12th April 2022 By Bridget O'Connell | email@example.com | @foodtickernz
Grain and edible oils business GrainCorp has lifted its earnings guidance by at least A$110m ($120m) on the back of significant global demand caused in part by Russia’s invasion of Ukraine.
The Australian-listed group, which is a major supplier to New Zealand food companies, has revised its earnings before interest, tax, depreciation and amortisation to between A$590m and A$670m.
The move comes just two months after the company released robust full year forecasts putting its EBIDTA at between A$480m and A$540m.
GrainCorp also lifted its profit after tax FY22 forecast range from A$235m – A$280m in February to A$310m – A$370m.
Russia and Ukraine collectively provide more than a quarter of the world’s wheat exports, causing the global price of wheat to spike, benefitting those who still have supply, like vertically integrated GrainCorp.
GrainCorp chief executive and managing director Robert Spurway said the company was seeing high global demand for Australian grain and oilseeds and strong supply chain margins for grain exports.
“This has been driven by two consecutive bumper crops in east coast Australia (ECA), coupled with supply shortages in the northern hemisphere,” the former Fonterra executive said.
“The conflict in Ukraine and resulting trade disruptions in the Black Sea region have created uncertainty in global grain markets, with buyers looking for alternate sources of supply.
“This has further increased both the demand for Australian grain and oilseeds and export supply chain margins.”
In New Zealand, the company’s food operation includes a processing plant at East Tamaki in Auckland where it refined, bleached, deodorised and blended edible fats and oils.
It also owns and operates five bulk liquid terminals at strategic locations around New Zealand.
In March, GrainCorp announced it has has partnered with Australia’s national science agency CSIRO and plant-based food producer v2food on a A$4.4m research project focused on the fast-growing plant-based protein market.
The partnership would work towards building Australian processing and manufacturing expertise to reduce reliance on imported ingredients and to add more value to grains and oilseeds so they can be used in new products.