Australia: GrainCorp warns of A$40 mln hit to half-year earnings, sources blame slowdown in China demand for barley
Australia's GrainCorp Ltd said on April 18 it will take a A$40 million ($28.7 million) hit to half-year earnings, blaming international trade tensions and a severe drought, sending its shares to a three-week low, Nasdaq reported.
The country's largest listed agribusiness did not give further details, but industry sources said there had been a slowdown in Chinese demand for barley as Beijing considers whether to introduce tariffs on Australian supplies.
A spokesman for GrainCorp declined to comment.
In a statement to the Australian stock exchange, the company said a disruption to grain trading conditions in the last six weeks to end-March would reduce expected half-year earnings before interest, tax, depreciation and amortisation (EBITDA) by A$40 million.
Shares in GrainCorp, which have been supported by takeover activity, fell nearly 4 percent to their lowest since March 28 before largely recovering to trade down 1.4 percent at A$9.28.
China late last year launched two probes into whether Australian barley was dumped into China, and whether Canberra has subsidised sales - allegations widely seen as politically motivated.
Australia is by far China's top supplier of barley, used both in brewing and livestock feed.
It exported 6.48 million tonnes in 2017, close to three-quarters of China's roughly 8.86 million tonnes of imports of the grain, worth about $1.5 billion, according to Chinese customs.
The probes follow a period of tense relations between Australia and China, including allegations by Canberra of interference in domestic affairs, jostling for influence in the Pacific, and a move to block China's Huawei Technologies from building a 5G network.
GrainCorp also said ongoing drought in eastern Australia "significantly" impacted summer crop production, especially sorghum.
The adverse weather shows little sign of abating, with Australia's weather bureau forecasting a 70 percent chance of an El Nino developing later this year, bringing hot, dry weather across the country's east coast.
The hit to earnings comes as GrainCorp plans a significant restructuring after receiving a A$2.38 billion takeover approach late last year.
The company earlier this this month said it would separate into two, spinning off and listing its global malting unit and restructuring its drought-hit grain business.
GrainCorp said at the time that it was still engaging with suitors vying for parts or all of the company.
Regresar
E-malt.com, la fuente de información global para los profesionales de la industria cervecera y de malteado. Los boletines quincenales de E-malt.com incluyen las últimas noticias de la industria, estadísticas en gráficos y tablas, precios mundiales de cebada y malta, y otra información relevante. Haga clic aquí para obtener acceso completo a E-malt.com. Si usted es un cliente de Castle Malting, puede obtener acceso gratuito al sitio web y publicaciones de E-malt.com. Contáctenos para obtener más información en marketing@castlemalting.com.
