Australian rice supplier SunRice has warned global rice prices, foreign exchange and problems with its latest crop could mean annual profits fall 15% in its current financial year.
SunRice issued on the warning on full-year earnings despite an increase in profits for the six months to the end of October.
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“In light of world rice prices, fluctuations in foreign exchange rates which impact key subsidiary businesses and operational challenges with the C13 crop, we are predicting net profit after tax for the full year may be up to 15% lower than last year,” CEO Rob Gordon said.
Chairman Gerry Lawson said SunRice had faced significant issues with the 2013 crop. Milling yields were low due to crop quality, which has led to additional milling costs.
He also said the 2014 harvest would be smaller given lower water allocations across the growing regions.
Improvement in overseas markets had helped SunRice reported the higher half-year sales and earnings. Net profit after tax reached A$16.3m (US$14.5m), up 8.5% on the year.
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By GlobalDataThe growth in profits came on the back of a 6.8% boost to sales, with consolidated revenues hitting A$554.3m.
Gordon said SunRice had fared better in overseas territorities. “Australian rice supplier SunRice has reported higher half-year sales and profits after improvement in overseas markets,” he said.
However, the company faced challenges in its domestic market. “Our import business, Riviana, … has been affected by negative foreign exchange impacts and increased competition in the domestic retail and food service sectors,” Gordon said.
