GrainCorp Limited (ASX: GNC)
Share price -$8.005
Annual dividend yield - 6.05%
Dividend Pay date - 12 December 2024
Dividend amount per share $0.24
Franking 100%
Dividend ex date - 27 November 2024
Market cap $1.75B
As of 26 November 2024
GrainCorp Limited (ASX: GNC) has announced its financial results for FY24, reflecting the company’s resilience in a challenging global market. For the year ending September 30, 2024, GrainCorp reported an underlying EBITDA of $268 million, down from $565 million in FY23, with underlying NPAT falling to $77 million from $250 million. The overall NPAT also declined to $62 million. The decline in profits was largely attributed to lower crop production in Australia, especially along the East Coast, and a challenging global grain market. Despite this, GrainCorp demonstrated strong discipline in managing costs, and achieved record oilseed crush volumes. The company also made strides in its strategic growth, including the acquisition of XF Australia, which expanded its Animal Nutrition portfolio, and a partnership with Ampol and IFM Investors to explore a domestic renewable fuel supply chain.
In terms of its Agribusiness division, GrainCorp’s EBITDA fell to $162 million for FY24, down from $351 million in FY23. This decline was largely due to lower grain production in key regions, including the East Coast of Australia and Western Australia. Total grain handled dropped to 28.0 million tonnes, down from 37.4 million tonnes in FY23, while exports also saw a decrease. Despite these difficulties, the company managed to increase sales volumes in its Animal Nutrition and Agri-energy segments. Notably, the oilseed processing division achieved record canola crush volumes, though crush margins were affected by weaker vegetable oil prices and lower crop volumes. The company’s core cash balance remained strong at $337 million, slightly down from $349 million in FY23, with net debt significantly reduced to $99 million compared to $373 million the previous year.
GrainCorp is among high quality dividend paying stocks having announced a final dividend of 24 cents per share for FY24, which includes a 14 cent per share ordinary dividend and a 10 cent per share special dividend, both fully franked. Both dividends will be paid on December 12, 2024, with a record date of November 28, 2024. In addition to the dividends, the company completed an on-market share buyback program, purchasing 3.1 million shares for approximately $27 million. GrainCorp is positive on FY25, expecting stronger grain production in some regions. However, global market conditions may still affect margins. The company is focused on strategic growth, enhancing efficiency, and delivering strong returns to shareholders.
Incitec Pivot Limited (ASX: IPL)
Share price -$3.195
Annual dividend yield - 6.49%
Dividend Pay date - 18 December 2024
Dividend amount per share $0.063
Franking 0 %
Dividend ex date - 3 December 2024
Market cap $6.05B
As of 26 November 2024
IPL’s FY24 performance demonstrated resilience in its core explosives and fertiliser distribution businesses, despite challenges in fertiliser manufacturing. Operational disruptions, including downtime at Phosphate Hill, weighed on results, but the company delivered a stronger second half following remedial actions. Underlying EBIT (excluding IMIs) came in at $580m, down from $880m in FY23, primarily due to the sale of the Waggaman facility. Excluding IMIs, NPAT was $401m, while operating cash flow totalled $290m. Including IMIs, IPL reported a Net Loss After Tax of $311m, a significant decline from FY23’s $560m profit. Fertiliser-related asset write-downs were driven by escalating gas prices on Australia’s Eastern Seaboard and challenges in securing competitive long-term gas contracts. These pressures resulted in the closure of the Gibson Island ammonia and urea plant and the devaluation of the Phosphate Hill operation, signaling IPL’s strategic pivot away from fertiliser manufacturing.
The company, one of the high dividend stocks maintained its commitment to shareholder returns, declaring a final dividend of 6.3 cents per share, bringing the full-year total to 10.6 cents per share ($202.8m). It also executed $649m in share buybacks, with $751m remaining under its $900m program. Robust cash generation supported a stronger balance sheet, with net debt to EBITDA improving to 0.8x (from 1.2x) and net debt reduced by $763m to $652m. Segmentally, Dyno Nobel Americas posted an EBIT of US$172m, down from US$390m in FY23 due to the Waggaman sale, although US explosives earnings grew 13% to US$132m. Dyno Nobel Asia Pacific delivered a record EBIT of $257m (FY23: $188m), driven by strong margins, customer recontracting, and increased adoption of premium technologies like electronic detonators and DIFFERENTIAL ENERGY® emulsions. Meanwhile, Fertilisers Asia Pacific reported an EBIT of $120m (FY23: $153m), with the closure of Gibson Island and reduced productivity at Phosphate Hill offset by an exceptional performance in the distribution business.
Looking forward, IPL’s growth strategy centers on its competitive advantages in technology, customer relationships, and innovation. The company has realigned its organisational structure, appointed a Chief Growth Officer, and improved asset maintenance strategies, enabling operational efficiencies and improved financial outcomes. Significant contract renewals with BHP Mitsubishi Alliance and Peabody, alongside new agreements with Fortescue and Anglo Gold Ashanti, reinforce IPL’s market position. Additionally, the commissioning of a fully automated electronic detonator plant in Helidon, Queensland, enhances competitiveness and efficiency. As IPL moves into FY25, its focus is on separating the fertilisers business and accelerating its transformation agenda to solidify its leadership in the global explosives market. These strategic initiatives are key to delivering long-term value and strengthening shareholder returns.
Source: Company’s Report
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