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Bulk grains handler GrainCorp says it will not pay shareholders an interim dividend after it swung to a $59 million half-year loss following severe drought conditions and trade disruptions.

The company announced while revenue from continuing operations for the six months to March 31 rose 25.5 per cent to $2.49 billion, drought shrivelled net profit by $95 million, from a $36 million gain a year ago.

“East coast Australian grain production was the lowest in over a decade and this has had a significant unfavourable impact on both our grains and oilseeds businesses,” chief executive Mark Palmquist said on Thursday.

As a result of the performance, the GrainCorp board determined it will cut its interim dividend from 8.0 cents a share a year ago, to zero.

GrainCorp said it expects challenging conditions in eastern Australia to continue into the second half.

Planting for the winter grain crop is well underway in eastern Australia, however the company said it is too early in the season to forecast grain production levels.

The company said it will continue to progress its portfolio review initiatives, including the demerger of its malt business, the combination of grains and oils, simplification and cost reduction initiatives, and the $350 million sale of its Australian bulk liquid terminals to ANZ Terminals.

Shares in the company were worth $7.97 before trade on Thursday, having fallen more than 10 per cent since suitor Long-Term Asset Partners withdrew its $2.38 billion takeover offer on Tuesday.

Graincorp shares were at a near seven-year low of $7.30 before LTAP’s offer in November.

Plans announced last month to demerge its global malting business briefly lifted GrainCorp shares, but those gains were offset when the company flagged a $40 million hit to half-year grains earnings two weeks later.

GRAINCORP REMOVES HY PAYOUT AMID PROFIT DROUGHT

* First-half net loss of $59m, from a $36m profit a year ago

* Revenue from continuing operations up 25.5pct to $2.49bn

* Interim dividend cut to zero, from 8.0 cents a year ago.