Agriculture company GrainCorp [ASX:GNC] upgraded its earnings guidance on Wednesday.
As a result, GrainCorp’s shares spiked over 5%.
Year-to-date, however, GNC shares have been flat.
GrainCorp, after hitting a 52-week high of $10.86 in May, is currently trading at around $8 a share:
Source: www.tradingview.com
GrainCorp’s FY22 earnings upgrade
GrainCorp has upgraded its earnings guidance for 12 months leading up to September 2022.
GrainCorp’s previous underlying EBITDA range for FY22 was around $590–670 million, which has now been upgraded to between $680–730 million.
Likewise, GrainCorp’s underlying NPAT has been upgraded to between $365–400 million, up from the previous range of $310–370 million.
Robert Spurway, GNC’s CEO, said the positive changes today reflects ‘outstanding executions’ across the business.
Mr Spurway commented:
‘We are pleased to upgrade our FY22 earnings guidance, with both our Agribusiness and Processing businesses on track to deliver record financial results.
‘We are operating our supply chains at close to full capacity and our teams have done an outstanding job in overcoming disruptions relating to weather and COVID to export 7.9 million tonnes of grain year-to-date.
‘We expect another well above average ECA crop in 2022/23 based on crop development we have seen to date, and a favourable 3-month rainfall outlook.
‘This positive outlook is driving an increase in fourth quarter activity and supporting export volumes, forward contracted grain sales and supply chain margins.’
GrainCorp’s other business segments (processing, feeds, fats, and oils), were also noted to have provided positive results in 2022.
Mr Spurway said the company is in the process of laying the groundwork for the upcoming winter harvest, including extra storage additions, and securing the equipment needed to boost capacity across its sites.
The company’s workforce is also to undergo a significant boost, with a casual staff recruitment programme having commenced.
GNC share price outlook
Back in May the company reported a substantial increase in EBITDA for the half year, upping the total to $427 million on 2021’s $140 million.
NPAT also increased from 2021’s half year total of $51 million to $246 million.
Mr Spurway then commented:
‘The result reflects excellent performance across all business areas and resilience in our supply chain.’
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