Margin Pressures and Safety Risks Cloud GrainCorp’s FY25 Despite Volume Gains

Robust Revenue Growth Amid Challenging Margins

GrainCorp Limited has delivered a resilient financial performance for the year ended 30 September 2025, reporting a 12.3% increase in revenue to $7.31 billion. This growth was driven by record grain handling volumes, particularly across its East Coast Australia (ECA) network, and strong expansion in its Animal Nutrition segment.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $308 million, up from $268 million in the prior year, while underlying net profit after tax (NPAT) increased to $87 million. However, statutory net profit fell sharply by 35.4% to $39.9 million, reflecting non-recurring items including a $26 million impairment related to its GrainsConnect Canada joint venture.

Operational Highlights and Strategic Initiatives

GrainCorp handled 31.6 million tonnes of grain in FY25, up from 28.0 million tonnes in FY24, benefiting from strong domestic crop conditions in Queensland and northern New South Wales. Despite this volume growth, margin pressures persisted due to abundant global grain and oilseed production, which constrained selling opportunities.

The company’s Animal Nutrition business achieved record sales volumes of 713,000 tonnes, supported by robust demand from the Australian cattle industry and New Zealand dairy sector. Meanwhile, the Nutrition and Energy segment saw a record canola crush volume of 557,000 tonnes, although crush margins softened due to a smaller Victorian canola crop and global oversupply.

Strategic progress included advancing renewable fuels ambitions through a memorandum of understanding with Ampol and IFM Investors, exploring a renewable fuels facility in Brisbane. GrainCorp also expanded its non-grain bulk materials handling and continued its business transformation program aimed at operational efficiency and future growth.

Sustainability and Governance Developments

In line with its vision to lead sustainable agriculture, GrainCorp achieved several sustainability milestones in FY25. It secured Science Based Targets initiative (SBTi) validation for its emissions reduction goals covering Scope 1, 2, and 3 emissions, and progressed the GrainCorp Next program, which partners with growers to develop a low-carbon canola supply chain.

The company improved energy efficiency across processing sites by over 2.5%, recycled more than 95% of dust and damaged grain, and advanced its tarp recycling program targeting zero tarps to landfill by 2027. GrainCorp also maintained its leadership in gender pay equity and achieved Family Inclusive Workplace certification.

Board renewal saw the appointment of two new independent non-executive directors, Samantha Hogg and Sarah Adam-Gedge, enhancing the board’s expertise in finance, technology, and sustainability. Meanwhile, long-serving director Kathy Grigg announced her retirement following the upcoming AGM.

Capital Management and Shareholder Returns

GrainCorp ended FY25 with a strong balance sheet, holding $321 million in core cash and maintaining disciplined capital management. The board declared a fully franked final dividend of 24 cents per share, comprising a 14-cent ordinary dividend and a 10-cent special dividend, consistent with the prior year’s total dividend of 48 cents per share.

The company continued its on-market share buy-back program, acquiring $38 million worth of shares during the year as part of a $75 million buy-back facility.

Outlook and Risks

Looking ahead, GrainCorp expects the 2025–26 winter crop to be above average, particularly in northern regions, although Victorian production is forecast to be below average. The company anticipates continued subdued margin conditions in FY26 due to strong global grain supply.

While crush volumes in Nutrition and Energy are expected to remain healthy, margins are likely to stay under pressure. The Animal Nutrition segment is poised for further growth, supported by high cattle on feed numbers. GrainCorp will maintain its focus on capital discipline, strategic investments, and sustainability initiatives to navigate the evolving market landscape.