GrainCorp sounded a note of caution over prospects for Australia's grain exporters even as it unveiled its first annual earnings for three years, helped by soaring storage and ports revenues.

The grain handler and seller said its sector faced tough competition worldwide for buyers, following a strong global harvest.

However, merchants in Australia, the world's fifth-biggest wheat exporter, faced the additional problem of a strengthened local currency.

"For everyone in Australia it will be a more challenging year export-wise than it was a year ago," GrainCorp chief executive Mark Irwin said.

Falling volumes

Mr Irwin added that Australia's lingering drought, which prompted crop downgrades last week and has hit GrainCorp's eastern stamping ground particularly hard, would dent the company's own grain volumes.

Furthermore, it looked unlikely to enjoy a repeat of last season's "unusually broad spread" of wheat grades, which made storage and shipping more tricky.

Combined with higher volumes from a better crop, this complexity helped revenues from ports, storage and logistics more than double.

"This season… the time taken to accumulate cargoes is likely to be shorter, leading to lower port-related earnings," Mr Irwin said.

Market reaction 

Group revenues in the year to the end of September rose 12.3% to Aus$1.53bn, held back by marginal growth in the group's biggest division, trading.

Helped by lower financing costs, curbed by debt repayments, the group reported earnings of Aus$63.2m, compared with an Aus$19.9m loss a year before.

Analysts at Credit Suisse said the overall results were in line with expectations, while noting "strong" results in storage, logistics and ports.

GrainCorp shares closed down 1.1% at Aus$6.29 in Sydney.