Shares in GrainCorp leapt 6% after the Australian grain handler said that, thanks to thriving port trade, it would bounce back into profit even further than it had hoped.

GrainCorp, in its second profits upgrade in less than three months, revised to Aus$53m-63m, from Aus$37m-42m, its forecast for earnings for the year to the end of next month.

The improvement reflected a jump to 4.5m-5.0m tonnes, from nearer 4m tonnes, in its forecast for grain handled through its ports.

The group, the dominant handler in eastern Australia, also edged its guidance for overall grain handlings higher too, to 9.5m tonnes from a range of 9.2m-9.4m tonnes, with export sales beating targets too.

'Morr competition' 

The improvement reflected Australia's withdrawal from GrainCorp rival AWB of the monopoly in bulk wheat exports, Mark Irwin, the GrainCorp managing director, said.

"The removal... has encouraged more competition in the Australian wheat market, and is driving a more robust export programme," he said.

However, Mr Irwin urged caution at the improvement in port earnings.

"They need to be looked at in the context that the earnings boost in 2009 follows two years of low export tonnages and associated terminal operation losses," he said.

GrainCorp posted losses in both 2007 and 2008, hurt by the impact of drought-damaged Australian harvests.

Market reaction

The statement was welcomed by investors, sending GrainCorp shares up Aus$0.50 to Aus$8.00 in Sydney, their strongest close in nearly 10 months.