A bumper crop in Australia and a strong malt business has boosted half year results of GrainCorp, Australia's largest grain handler and the world’s fifth largest malting company.
Revenue for the half year ended March 31 was 19% higher at A$2.46 billion (HY16: A$2.07bn), EBITDA was 76% up at A$236m (HY16: A$134 million) and net profit more than quadrupled to A$90 million in the six month period through March from A$20.4m a year earlier, the company said in a statement on Thursday.
“GrainCorp’s strong first half performance benefited from the large Australian grain harvest and higher export volumes, combined with our intense focus on improving network efficiency and managing costs,” GrainCorp’s Managing Director & Chief Executive Officer Mark Palmquist said.
Also the company’s malt business, which was bought in 2009 for $655 million (A$757 million) from New York based private equity firm Castle Harlan and its Australian affiliate, CHAMP Private Equity, performed strongly despite an unfavorable foreign exchange impact.
In order to align malting capacity with consumer demand, GrainCorp Malt will more than double available capacity to more than 220,000 tons at the malt plant in Pocatello, Idaho to come online in July this year. In December last year, the company sold a malthouse in Germany (inside.beer, 15.12.2016) and the company is currently seeking an investor for its remaining malting business in Germany with a combined capacity of 140,000 tons.
“It does not represent a change in focus or strategy in terms of target markets for us,” said Mr Palmquist in respect to the already concluded deals. ”It was a decision based on the respective facilities rather than an overall strategic direction.”
The company in March also sold its 60% stake in Allied Mills Australia, one of Australia’s largest manufacturers and distributor of bakery products, for the sum of A$190m to private-equity firm Pacific Equity Partners (PEP).