Graincorp records FY08 profit loss

Graincorp Ltd has posted an annual loss of almost $20 million for the second consecutive year but says it will return to profitability in fiscal 2009.

The grain handler, storer and marketer posted a $19.9 million loss for its financial year ended September 30 and said it would not issue a final dividend.

Graincorp's result was in line with its guidance given at its the half year results and follows a $19.8 million loss in net profit after tax for its 2007 financial year.

Managing director Mark Irwin said he was confident Graincorp would return to profitability this financial year but would not offer guidance on net profit until the current harvest was further advanced.

Earnings before interest, tax, depreciation and amortisation (EBITDA) were up 60.8 per cent to $51.3 million in fiscal 2008 compared with the previous year.

Mr Irwin said the earnings growth reflected a record sorghum crop.

However, earnings were affected by interest costs, higher inventory funding costs due to record grain prices and a disappointing grain marketing result.

"The effect of the drought in many areas of Queensland, NSW and Victoria significantly reduced the size of the 2007 winter crop harvest, and thus grain receivals and carry," Mr Irwin said in a statement on Wednesday.

Mr Irwin said better seasonal conditions point to a much improved winter crop harvest in Queensland and northern and central NSW.

Conditions in southern NSW and Victoria remain drought affected.

A strong sorghum harvest was expected in northern NSW and Queensland, Mr Irwin said.

Graincorp closed down one cent at $6.29.