SunRice has released its half yearly results, reporting consolidated revenue increase of seven per cent and a net profit after tax of $13.9 million, down 42 per cent compared with the previous year.
The results for the six months to 31 October 2018 show the company’s profit guidance for the 2019 financial year (FY19) remaining between $30-35 million.
Despite poor milling yields, the paddy price range for medium grain remained at $360-$400 per tonne.
Rice Food, CopRice and Riviana all experienced profitability growth during the six months, with CopRice’s revenue increasing by 49 per cent due to an increased demand for stockfeed.
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SunRice CEO, Rob Gordon, said FY19 is anticipated to be a challenging year for the SunRice Group, with prevailing global rice market trading conditions and exchange rate moments impacting its revenue and profitability.
“SunRice’s seven per cent revenue increase compared to HY18 was due to a combination of factors. International rice prices firmed during the period by around 30 per cent and exchange rate movements enhanced the value of Australian rice exports,” Gordon said.
“Despite stronger revenue, SunRice profitability was undermined by several factors. The firmer rice prices that benefited revenue also increased the cost of some of SunRice’s key internationally sourced export varieties.
“In addition, profitability was negatively impacted by the falling value and lack of liquidity of the PNG Kina, as well as other generally unfavourable foreign exchange movements compared to HY18,” he said.
The company also completed two acquisitions during the period, including a rice mill in Vietnam, which the company aims to use to create a vertical supply chain and provide a more stable supply of rice.
SunRice also plans to list shares on the ASX in early 2019 to raise equity capital and accelerate its 2022 Growth Strategy.