Graincorp (ASX:GNC) shares close higher on surging crops’ demand

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Graincorp (ASX:GNC) shares close higher on surging crops’ demand

ASX GNC share price
Image source: © Solarseven | Megapixl.com

Highlights

  • GNC shares are rising on a recent hike in global demand for Australian grain and oilseed.
  • The stock has gained 38% over the last three months.
  • GNC has recently upgraded its FY22 earnings guidance.

Shares of grain storage and production company, Graincorp Limited (ASX:GNC), closed 0.864% higher at AU$10.500 per share today despite any specific announcement.

Investors have been keeping the stock on their radar after the stock climbed 2% to a record high of AU$10.635 this morning.

 

This comes after the company posted earnings guidance since 7 February 2022, i.e., before the Russia and Ukraine conflict.

On this note, here’s a look at why GNC shares have been on a gaining streak today.

A company’s share price depends upon its financial and operational activities. However, global market fluctuations also impact the share price performance. 

Recently global grain prices have hit a 25-year high. This might be the reason investors are drooling over the stock as GNC has further upgraded its FY22 earnings guidance.

GNC’s managing director and CEO Robert Spurway said that the improved guidance reflects the ongoing global demand for the Australian grain and oilseeds coupled with favourable planting conditions for the upcoming winter corp.

Related read - Why GrainCorp (ASX:GNC) upgraded its FY22 earnings guidance

Impact of the Ukraine & Russia War

As per the company, apart from the surging global demand, the Russia and Ukraine conflict has also resulted in trade disruptions, creating uncertainty in the global grain markets. Hence, buyers started looking for alternative supply options, which simultaneously increased the demand for Australian grain and oilseeds and export supply chain margins.

GNC earnings outlook

Recently the grain storage and production business lifted its FY22 earnings guidance to update trading conditions.

As per the release, GNC expects an underlying FY2022 EBITDA guidance in the range of AU$590-AU$670 million from AU$480 million to AU$540 million amid surging global demand for grain.

It has further lifted its underlying NPAT guidance for FY22 to AU$310 – AU$370 million from AU$235 0 AU$280 million.

However, the company said its FY22 earnings guidance is subject to various market conditions.

GrainCorp will soon provide a further update on its half-year results this month, which might be the reason why investors are keeping the stock on their radars.

 

GNC share price movement

Image Source © 2022 Kalkine Media ®

GNC shares gained over 99% in the last 12 months and have delivered 209% in the last three years. The stock has delivered 24% return on YTD this year.

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