GrainCorp, Australia’s largest listed bulk grain handler, said its annual underlying net profit fell 50 percent, hurt by the drought in the eastern states. GrainCorp’s first half profits decreased by 64 per cent to just $36 million.

A drought-ravaged Australia’s east coast cropping landscape and higher energy costs have shrivelled GrainCorp’s balance sheet, with the bulk grain shipper and handler’s full-year profit dropping 43.7 per cent to $70.5 million. Revenue was down $322 million, or 7.1 per cent, to $4.253 billion in the year to September 30, with a rise in malt and oil revenue failing to offset a $380 million drop in grain earnings, the company announced. Total GrainCorp grain sales were down 1.4 million tonnes, or 16.9 per cent, to 6.9 million tonnes, with grains revenue dropping $380 million to $2.24 billion.There were 15 fewer silos operating the 2018 summer harvest, down from 160 last year. The company warned of a severe decline in eastern Australian grain production in fiscal 2019 due to dry weather conditions and said it expected production to be skewed to Victoria and southern New South Wales states. It said conditions would remain challenging. The 2019 financial year will be extremely challenging for GrainCorp with expectations of a substantially smaller (East Coast) crop due to the current drought,” chief executive Mark Palmquist said in a release. Australia’s agricultural commodities forecaster warned in late October that the devastating drought was expected to cut the east coast’s crop production this year to less than half its average over the past 20 years. GrainCorp cut about 50 jobs in middle management last month and administration on forecasts of a severely reduced summer harvest, with further cuts expected as a bleak 2019 looms.