Graincorp has lifted its full-year profit guidance despite the crippling eastern Australia drought, buoyed by demand for malt from the North American craft beer boom.
Graincorp on Thursday said the demand for malt from brewing and distilling had helped it raise its underlying net profit guidance range from between $50 million and $70 million to between $60 million and $75 million.
Shares in Graincorp rose as much as 6.2 per cent before falling back to sit 1.1 per cent higher at $7.98 against the backdrop of an overall 0.9 per cent decline on the Australian share market at 1200 AEST.
Away from the malt business, chief executive Mark Palmquist noted conditions were more challenging.
“The benefits of our diversified business model are again being demonstrated in the face of the substantial drought challenges in eastern Australia,” Mr Palmquist said.
“These conditions have slowed export volumes as farmers and the domestic market move to secure supplies.”
Mr Palmquist said Graincorp expects a considerable decline in grain production in eastern Australia, with production again skewed to Victoria and southern NSW.