Grain demand remains strong.
RECORD grain receipts and shipments from Australia helped keep Viterra in the black in the fourth quarter, but the Canadian agribusiness said the economic environment remained challenging.
In an earnings call on Wednesday (Canadian time), the company said writedowns, asset disposal losses and higher taxes had cut net earnings for the three months to October 31, from $C53 million ($50.3 million) a year earlier to $C9 million.
The gains from strong fertiliser sales volumes and pricing were offset by lower contributions from international grain marketing and handling, which also imposed higher costs on the company.
Paul Jensz, an analyst with Austock in Melbourne, said the main implication for investors was that the tougher conditions reported by Viterra could make GrainCorp's strong profits harder to repeat this year.
About 15 per cent of GrainCorp's earnings came from international market trading, Mr Jensz said.
He said despite talk about potential takeover activity in Australia, Viterra appeared more focused on North America and Europe.
Viterra acquired ABB Grain in 2009, and about one-third of its earnings now comes from wheat, barley and other grain-handling and marketing operations, principally in South Australia. The company also has a malt division in Australia, and is opening a new plant at Minto.
Viterra said the grain harvest in South Australia was virtually complete, and it expected to receive 6.5 million tonnes to 6.8 million tonnes into its grain-handling network this financial year. The carry-in stock from last year stood at 1.8 million tonnes.
Viterra's chief operating officer for grain, Francis Malecha, said the company's total grain storage capacity in Australia was 10 million tonnes, and ''we have added some bunker space in key locations as well to accommodate these larger harvests that have happened in the last couple of seasons''.
Questioned about the speed of grain shipments to December, Mr Malecha said, ''If we continue on the current pace that we are on and given the crop size that we've had in both [Australian and Canadian] markets, we would run out of grain at some point in time in the year.
''So I expect that we won't keep the pace that we've seen in the first two months of the fiscal year into the balance of the year.''
''But demand continues to be strong,'' he added.
