GrainCorp (ASX:GNC) reaffirms FY22 guidance; shares gain

Highlights

• GrainCorp affirms to deliver AU$590-AU$670 million of EBITDA in FY22. 
• The company's dividend payout ratio is expected to be between 50%-70%.
• The shares of GrainCorp gained on the ASX, backed by this announcement. 

The shares of GrainCorp Limited (ASX:GNC) were spotted trading 4.18% higher at AU$9.47 per share at 1:54 PM AEST on the ASX today (21 June). More than 753K shares of GrainCorp have exchanged hands until this article was written. 

Today, the ASX-listed food and staples retailer shared a presentation for its investors, reaffirming the company's guidance that was earlier stated on 8 April 2022. The presentation also gave a brief idea about GrainCorp's financials, strategic initiatives, etc. 

The share price of GrainCorp has gained over 84% on the ASX over the past 12 months. On the other hand, GrainCorp's year-to-date share price also gained around 12.8% (as of 1:54 PM AEST on the ASX today, 21 June). 

Details of GrainCorp's reaffirmed guidance: 

GrainCorp confirmed its previously announced FY22 earnings guidance through an announcement on the ASX today.

The company expected underlying EBITDA for the financial year 2022 to stand true, i.e., AU$590 million to AU$670 million. GrainCorp's confirmed Net Profit After Tax (NPAT) guidance for FY22 is AU$310 million to AU$370 million.

Regarding GrainCorp's production, the company expects to see total receivables of 16.0mmt to 17.0mmt and exports 4 of 8.5mmt to 9.5mmt for FY22.

Details of GrainCorp's capital management and cash flow:

GrainCorp's board informed through the presentation that the company aims to maintain a disciplined approach to capital management and minimize its core debt. The company's annual expenditure will lie between AU$35 million to AU$45 million per annum.

Disciplined capital management will also lead to surplus cash flow, which the company will use for re-investing into business and returning to shareholders. GrainCorp's annual expenditure will likely lie between AU$35 million and AU$45 million. 

GrainCorp also held a strong cash position with AU$129 million as of 31 March 2022.

Details of GrainCorp's dividend distribution and shareholders' return: 

Image source: © Lovelyday12 | Megapixl.com

GrainCorp has been a reliable dividend payer throughout. The company affirmed this time that its dividend payout ratio would be between 50% and 70%. The company additionally believes in being able to pay special dividends due to surplus cash flow in the years to come. Moreover, GrainCorp's historical dividend record shows that the company has consistently been increasing its dividend payout rates over the past couple of years.

Furthermore, GrainCorp is currently executing its AU$50 million share buyback program, which was announced in November 2021.  

Also Read: APA Group (ASX:APA) signs deal for Hunter Power Project, shares fall