SYDNEY, AUSTRALIA — Due to challenging conditions in the global grain markets, GrainCorp said on Nov. 3 that it expects its net profit will drop to A$32 million for 2014-15, from A$50 million the previous year.

Underlying profit is expected to fall to A$45 million, from A$95 million. The company also expects to report underlying earnings before interest, taxes, depreciation and amortization (EBITDA) of A$235 million.

GrainCorp will release its audited results and a more detailed update on Nov. 12.

“Whilst it’s pleasing our processing businesses have contributed a significant portion of the year’s expected earnings, fiscal year 2014-15 has largely been influenced by factors in our grains business,” said Mark Palmquist, managing director and chief executive officer. “Continued challenging conditions in global grain markets have affected the result of GrainCorp Marketing. This has only been partially offset by a good performance from Storage & Logistics with upcountry receivals of 7.4 million tonnes and grain exports of 3.5 million tonnes in the face of a smaller eastern Australian crop.”

GrainCorp expects to report sales volumes for Marketing of 6 million tonnes, full year EBITDA loss of A$2 million (first half of 2015 gain of A$8 million) and full year profit before taxes, depreciation and amortization (PBTDA) loss of A$16 million (first half of 2015 loss of A$1 million).

“Lower grain production in eastern Australia resulted in intense competition to originate grain, while bigger crops and stock levels in other regions also generated strong competition from alternative supply origins,” Palmquist said. “This situation was exacerbated by lower fuel costs and ocean freight rates, which reduced Australia’s freight advantage to major export destinations and made Australian grain more expensive, severely limiting the opportunities available.”

“Our team has maintained strong discipline in the face of these challenges and given that many of our competitors have reported experiencing similarly difficult conditions, we have actually performed relatively well,” he said. “I’m also pleased about the positive performance of Storage & Logistics in the tough environment, due to improvements in cost management and a strong sorghum export program in the second half.”

GrainCorp also expects to report significant items totaling approximately A$12 million (after tax). The significant items total is slightly higher than previously indicated, due to additional restructuring costs in Storage & Logistics and Oils and an impairment of a Malt elevator in Canada.