GrainCorp to pay special dividend, buy back shares

afr.com:

GrainCorp has unveiled a $50 million share buyback and declared a special dividend in a sign of confidence the business can withstand adverse weather conditions expected to affect Australian farmers.

The east coast grain handling and storage giant said acquisitions were on its radar despite farmers grappling with hotter and drier conditions stemming from the onset of the El Niño weather pattern.

GrainCorp is already Australia’s biggest oilseed crusher. 

It is also set to make a push into Western Australia under plans to for a huge increase in oilseed crushing capacity as part of a strategy to become a force in the agri-energy space.

It shares traded 5.3 per cent higher at $7.83 shortly after 11am AEDT.

GrainCorp has long coveted a bigger footprint in WA, where CBH dominates grain storage and handling, and has identified the state as the best home for a new oilseed crushing plant with capacity of 750,000 tonnes — 1 million tonnes a year.

GrainCorp will pay a special dividend of 16¢ and a final dividend of 14¢, both fully franked, after ending the year with a cash balance of $373 million. It has a September 30 balance date.

Robert Spurway-led GrainCorp said on Thursday its net profit fell to $250 million from $380 million a year earlier, but that the figure was toward the higher end of its guidance after a third consecutive bumper harvest.

GrainCorp handled 37.4 million tonnes in the year ended September 30 and exported 8.3 million tonnes on its way to earnings before interest, tax, depreciation and amortisation of $565 million. The result surpassed upgraded guidance issued in May but was down from $703 million last year.

Global grain heavyweights like former GrainCorp suitor Archer Daniels Midland, Bunge, Louis Dreyfus