February 23, 2017 / 11:34 PM / 8 months ago

Australia's GrainCorp expects profit to double on back of bumper crop

SYDNEY, Feb 24 (Reuters) - Australia’s largest listed bulk grain handler, GrainCorp Ltd, said on Friday it expects profits to more than double in 2017 due to a bumper wheat crop.

The company, which had previously forecast growth without giving details, said in a statement it expected underlying net profit for 2017 of A$130 million to A$160 million ($100-123 million) compared with A$53 million for 2016.

The 2016/17 season, just harvested, marks Australia’s largest-ever wheat crop, with output of 35.13 million tonnes surpassing a previous record in the 2011/12 season and helping to push benchmark global prices to a 10-year low in August 2016.

However the high production is a boon for GrainCorp, given it derives income from storing and trading grain.

“One of the largest harvests ever seen in Australia will bring enormous benefits for our regional communities and for GrainCorp,” Chairman Don Taylor said in a speech at the annual shareholder meeting.

Shares in GrainCorp rose 3.4 percent at the open of trade, while the broader Australian market traded 0.3 percent lower.

In 2016 the company reported a fall in profit, owing to restructuring costs and a smaller grain crop.

U.S. agricultural commodities trader Archer Daniels Midland Co finally sold its 19.9 percent stake in GrainCorp in December, almost three years after Australian regulators stymied their A$2.8 billion takeover bid. ($1 = 1.2963 Australian dollars) (Reporting by Tom Westbrook; Editing by Stephen Coates)

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