GrainCorp has lowered its FY26 earnings guidance, citing persistent global oversupply and weak grain prices that are squeezing margins and volumes. The agribusiness is accelerating cost controls while maintaining a strong balance sheet to navigate these headwinds.
- FY26 Underlying EBITDA guidance lowered to $200-240 million from $308 million
- Underlying NPAT expected between $20-50 million, down from $87 million in FY25
- Receival volumes forecast to drop to 11.0-12.0 million tonnes from 13.3 million tonnes
- Export volumes expected to decline to 5.5-6.5 million tonnes from 7.0 million tonnes
- Cost management initiatives accelerated amid ongoing margin pressure
Challenging Market Conditions
GrainCorp Limited has revised down its earnings outlook for the 2026 financial year, reflecting the persistent challenges in global grain markets. The company now expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to fall between $200 million and $240 million, a significant drop from the $308 million reported in FY25. Net profit after tax (NPAT) is also forecast to decline sharply, with guidance set between $20 million and $50 million compared to $87 million last year.
These adjustments come amid a backdrop of record global grain production that has created an oversupply, outstripping demand growth and exerting downward pressure on commodity prices. GrainCorp’s Managing Director and CEO, Robert Spurway, highlighted that despite a strong winter crop harvest on Australia’s East Coast, growers are less incentivised to bring grain to market due to low prices and abundant supply.
Volumes and Margins Under Pressure
The company anticipates receival volumes to fall to between 11.0 and 12.0 million tonnes in FY26, down from 13.3 million tonnes the previous year. Export volumes are also expected to decline to 5.5-6.5 million tonnes from 7.0 million tonnes. These volume reductions, combined with grain export margins at multi-year lows, are key factors weighing on GrainCorp’s profitability.
In its Nutrition and Energy segments, GrainCorp expects average crush margins and animal nutrition contributions to remain steady compared to FY25. However, the agribusiness energy division faces uncertainty, particularly due to ongoing ambiguity around US biofuels policy, which is expected to reduce contributions in this area.
Strategic Response and Outlook
In response to these headwinds, GrainCorp is accelerating cost management initiatives to maintain operational discipline without compromising service quality to growers. The company emphasised that its balance sheet remains robust, providing a solid foundation to continue executing its strategic priorities despite the challenging environment.
Looking ahead, GrainCorp’s FY26 guidance remains subject to several variables, including grain volumes (notably sorghum receivals), timing and volume of exports, supply chain margins, oilseed crush margins, and potential new season opportunities in the final quarter.
Investors will be watching closely as GrainCorp navigates this complex market landscape, balancing the pressures of oversupply and low prices with disciplined cost control and strategic execution.
Bottom Line?
GrainCorp’s earnings downgrade underscores the tough grain market cycle ahead, but its strong balance sheet offers a buffer as it adapts.
Questions in the middle?
- How will GrainCorp’s cost management initiatives impact long-term operational efficiency?
- What are the potential effects of US biofuels policy changes on GrainCorp’s energy segment?
- Can GrainCorp capitalise on new season opportunities to offset volume and margin pressures?