GrainCorp, Eastern Australia's largest cereals and oilseeds originator, processor and shipper, reported falling profits, as oilseed crush margins narrow, and Australian wheat struggles to compete in the world market.
But significant growth in its global malt business, driving by demand from the craft brewing industry, helped offset some of the losses. .
The Sydney-based business saw underlying net profit fall by 9% in the six months to March 31, to Aus$34m.
Earnings before interest, taxation, depreciation and amortisation (ebitda), fell by 1.5%, to AUS$134m.
But revenues were up to $2.17bn in over the same period, compared to AUS$136m and AUS$1.78bn in the first half of fiscal 2015.
Revenues at Graincorp's malt division rose by 11% year on year, to AUS$593m, with profits also up.
GrainCorp managing director and chief executive Mark Palmquist noted that Malt's strong demand for its specialty products from the North American craft brewing movement and the global distilling industry.
There were also operational and processing efficiency savings, helped by the good quality of the 2015 barley crop, he said.
But the increase could not wholly outweigh falling revenues and profits in the company's oilseed division.
Oil crush margins are under pressure, GrainCorp said, strong EU demand for canola, and the smaller world crop, increased the raw material costs.
At the same time, the difficulties of the New Zealand dairy industry meant there was less demand for oilseeds and meal as feed ingredients.
Looking ahead, GrainCorp notes "good sowing rains" across Australia's main grain growing regions, following a dry, warm autumn, which is well timed for the 2016 production cycle.
It is predicting an Eastern Australian grain crop (wheat, barley, canola and sorghum) of 17.5m tonnes in 2016, up from last year's 16.5m tonnes.
But, with 20-25% of the region's 2015 crop still unsold, and a background of abundant world supplies and low ocean freight rates, Australian grain is relatively uncompetitive.
GrainCorp expects Eastern Australia's 2016 exports to be in the 2.4-3.0m tonne range from the 3.5m tonnes shipped in 2015.
It predicts a 2-2.5m tonnes carry-out stock, up from the 1.6m tonnes at the end of the 2015 marketing year.
GrainCorp foresees an increase in global barley production at 143.4m tonnes in 2016, up from 141.5m tonnes the year before.
And Australia's canola output is set to fall to 2.9m tonnes (3.5m tonnes in 2015).
While demand for oil may strengthen, the low demand for animal feed and global completion for crushing and refining supplies are set to continue.