The GrainCorp Limited (ASX: GNC) share price is surging today amid the company announcing it has increased its earnings guidance for this year.
Shares in the integrated grain agribusiness currently trade for $8.17 each, 6.94% higher after hitting an intraday high of $8.43 a share this morning. That was a jump of more than 10% on yesterday's closing price.
For context, GrainCorp's home sector, the S&P/AXS 200 Consumer Staples Index (ASX: XSJ), is currently up 0.9% while the benchmark S&P/AXS 200 Index (ASX: XJO) is down 0.07%.
Let's find out what the company announced to the market today.
What happened?
GrainCorp upgraded its earnings guidance this morning for the period until September 30 this year.
Estimates for earnings before interest, taxes, depreciation, and amortisation (EBITDA) have been raised to $680-$730 million, well up from the earlier guidance of $590-$670 million.
As well, the company's net profits after tax (NPAT) guidance was also boosted to $365-$400 million, up from $310-$370 million.
GrainCorp Managing Director and CEO Robert Spurway said:
We are operating our supply chains at close to full capacity and our teams have done an outstanding job in overcoming disruptions relating to weather and COVID to export 7.9 million tonnes of grain year-to-date. This positive outlook is driving an increase in fourth quarter activity and supporting export volumes, forward contracted grain sales and supply chain margins.
GrainCorp said it will invest in additional bunker storage and grain handling equipment in preparation for the upcoming winter harvest. They are also recruiting additional people to help harvest crops.
GrainCorp share price snapshot
The GrainCorp share price has gained more than 52% in the past 12 months although it is still 1.3% lower year to date.
Its shares are outperforming the benchmark index which contracted around 7% in the last year and 5.6% in 2022 so far.
At the current share price, GrainCorp's market capitalisation is $1.8 billion.
