I would now like to hand the conference over to Mr. Robert Spurway, Managing Director and CEO. Please go ahead.
Good morning, everyone, and welcome to the GrainCorp Annual Results Forum for financial year 2024. We're presenting to you today from Sydney, and I want to acknowledge the Gadigal people of the Eora Nation, and we pay our respects to elders past and present. For those of you following online, I'll call out the page numbers as we go, starting with page four. This morning, I'll share with you the results highlights, some comments on strategy and growth. Ian Morrison, our Chief Financial Officer, will then talk through more detail on the financial performance and cover off details of the strength of our balance sheet and our capital management initiatives. And I'll close with some comments on the outlook and recap and conclusion. Moving to page five, highlights for the year include financial results of an underlying EBITDA of AUD 268 million.
Pleasingly, we delivered record oilseed crush volumes of 540,000 tonnes. Earlier in the year, we completed and signed an MoU with Ampol and IFM Investors as we continue to progress our ambitions in the agri-energy space. We completed our expansion and acquisition of animal nutrition portfolio company XF Australia. That also allowed us to increase our average through-the-cycle earnings to $ 320 million. We finished the year with an incredibly strong balance sheet with $ 337 million in core cash, and that has allowed us over the course of the year to complete capital management initiatives of over AUD 130 million in terms of returns to shareholders, including our buyback and total dividends of AUD 0.48 per share fully franked. In summary, for the year, we are responding effectively to the evolving market conditions and the volatility and variability we face.
Importantly, we're controlling the things that we can control, and we're doing that well. On page six, the numbers speak for themselves. You can read it more quickly than I can. Underlying EBITDA of AUD 268 million for the year, underlying net profit after tax of $ 77 million per year, and a core cash position, as I said earlier, of $ 337 million. Ian will talk about some of the details, but as we announced at half year, grain handled and volume of production in Australia was significantly down in the year relative to prior years. Although up on average, it was certainly a tale of two halves in terms of geography, with very dry and challenging conditions in the north of Australia, offset by good growing conditions in Victoria for last year's crop.
Towards the end of the call, I'll talk about the far more positive conditions we're facing in the current harvest. On page seven, starting with health and safety, at GrainCorp, we always strive for zero harm, and we're pleased to report an improvement in our headline results for safety and our frequency rates, as you can see at the top of page seven. Importantly, we work hard every day to achieve that zero harm ambition, managing areas like critical risk, and as many businesses are doing, focusing not just on physical safety, but psychosocial hazards and management of those in our workplace. We've developed bespoke and tailored learning modules across the business. Our safety approach includes contractors as well as employees. And importantly, we've got an ongoing focus on hazard identification and reporting across our business.
You'll see more detail on that in the annual report and also in our sustainability report, which, as we say on page eight of the presentation, we're launching today our 2024 sustainability report. That's an online report, and I encourage all of you to read it and recommend the content both in terms of our commitments and the progress we're making. To call out some of the highlights through the year, we've seen a 5% reduction in emissions per tonne across our processing sites. We've developed SBTi, or Science-Based Target Initiatives, targets, and we'll be updating the market on the progress of that throughout the year ahead. Excitingly, we've launched GrainCorp Next. That's an initiative to demonstrate a low-carbon canola value chain. It links growers and customers and ultimately consumers, demonstrating what's possible and delivering value for the future.
This year, GrainCorp was invited by the federal government to join the Jet Zero Council. It's an important part of the work that we're doing in our agri-energy ambitions, and we're delighted to be representing the feedstock sector on the Jet Zero Council. Earlier in the year, we also announced our gender pay gap through the WGEA reporting, and we were delighted to see that GrainCorp came out with the lowest gap in gender pay of any ASX 200 business. As I said, a number of highlights and many more to read about in our annual sustainability report.
If we move through to page 10 now in GrainCorp's vision and strategy, for those that follow us, you'll see that this is a refreshed strategy linked very closely to what we've been working on over the last four or five years, but improving the clarity both of what we're doing, what we're delivering, and what we're focusing on for the future. You'll recall that previously our strategy was in two very deliberate and clear parts. First part around leveraging capabilities and delivering on the value of our strategic assets. We also called out previously the targeted growth areas we'd be working on.
In this refreshed strategy, those largely remain the same, but we've been very clear about food, feed, and agri-energy as areas for growth and calling out the tools and enablers that help us get there in growth, but also deliver that commitment on our existing assets and capabilities, areas such as technology, digital, and future capabilities. Our strategy is, of course, underpinned every day by our values. We stay safe, we do what's right, we care, and we deliver. On page 11, our strategy and action is an example of GrainCorp doing what we said we would do. Across our pillars in the strategy of enhance, expand, and evolve, over the next few slides, I'll call out some examples of that and the progress we're making, but just in brief, as I said earlier, we've delivered record oilseed crush volumes across our crush facilities around Australia.
We've progressed our port strategy and continue to improve the utilization, diversification, and importantly, margin that the bulk materials and non-grain products provide through those strategic assets. Last year, we talked about the underperforming New Zealand foods business. Following a completion of that review, we've commenced closure of the underperforming asset at East Tamaki. Ian Morrison will talk in more detail about that in the financial section of this presentation. We completed the acquisition of XF Australia. We've signed an MoU with IFM Investors and Ampol in the agri-energy space, and we're investing in people and systems to improve the efficiency of our business and reduce complexity and make ourselves future fit. Just expanding on that and moving to page 12, I touched on the diversification of earnings through our port assets.
It's an initiative we've been talking about now for the last four or five years, and we've shared some of the headlines of that. And today, we wanted to share a little more detail around the numbers and the progress that we're making and the achievements that are apparent. If you look to the right-hand side of the page, you can see that over the last four years, contribution margin has grown from $ 26 million-$ 36 million. This is when we're using the latent capacity in our ports, diversifying by handling products like wood chips, fertilizer, cement, sand, and meal. It's not just about growing the volume, but it's also about renegotiating the contracts to leverage the value of those assets and grow margin at the same time. Our priorities in 25 will see us continue to expand and, importantly, improve the margins across that portfolio of products.
On animal nutrition, on page 13 in the deck, we've talked about the completion of the acquisition of XF Australia back in April of this year. At the time, we spoke about that business contributing roughly $ 10 million annually. I'm pleased to report in the six months through acquisition, it achieved $ 6.5 million, and so is very much on track with the guidance we gave and the increase in our through-the-cycle earnings to $ 320 million. On the right-hand side of the page, I want to just stress the reason that we're focused on animal nutrition in our portfolio. You can see 3% growth, very healthy over a more than 20-year period, but importantly, in the last 10 years, that's accelerated and growth in terms of cattle on feedlot in Australia of 4.3% per annum.
It's an exciting space to be in, and the technological capability that GrainCorp's existing and new businesses have in that space set us up well for future growth. In terms of our progress on the oilseed crush expansion on page 14, top of the page there, we talk about the progress we've made through financial year 2024. The first few points on the page we've covered through announcements earlier in the year, and we're pleased to have the MoU with Ampol and IFM Investors as we partner to bring across and bring together a complex value chain that has some very compelling fundamentals into the future. Pleasingly, as I touched on earlier, we were invited to join the Jet Zero Council, and through H2, we've attended that forum, and we're representing the feedstock sector more generally.
It's an important part of our priorities in financial year 2025, not just to develop the investment and business case alongside our partners, but also to drive and influence government strategy to create certainty in the future for investment, not just for GrainCorp in the ag sector, but for the whole of the value chain and the important opportunity for Australia, particularly in sustainable aviation fuel. Project timing is something we regularly get asked about. We would expect to target a FEED phase in 2026. I would say that we're moving as fast as industry will allow. It's important that we develop the demand signal across the sector so that we're building a business case and ultimately investing at the same time that demand from refiners and fuel processors is coming online in Australia.
Supporting government policy to develop opportunities for mandates and an appropriate environment will certainly help accelerate those timelines and provide certainty for investment into the future. On page 15, we spoke at the half year at a high level about our business transformation program. It's a program to unlock efficiencies and drive returns across our very valuable integrated value chain. It's also an opportunity to address an end-of-life version of SAP, which modernizes our systems for the future. We're pleased to call out today the financial benefits we expect from that program of AUD 20 million-AUD 30 million, which will ultimately roll into our through-the-cycle average earnings forecast. The reason for the savings or the value behind the savings sits in reduced costs, areas like procurement and simplification across the business.
Over on page 16, we talk about the phasing of the program and the phased approach we're taking to target completion by financial year 26. In the year just gone, we invested about AUD 25 million in the program. We completed the planning and design phase, and we're now into the release one version of the program through nutrition and energy, and we would expect to start later this year release two across our agribusiness and corporate areas. The reason we're phasing the program is to maximize the benefits we can achieve, but also manage the risk across our business. As I said, we expect to deliver improvement in earnings of AUD 20 million-AUD 30 million as a result of this program as it completes. I'm now going to hand across to Chief Financial Officer Ian Morrison to talk through the financial performance and segment reporting. Thanks, Ian.
Thanks, Robert.
I'll now move on to slide 18 and summarize financial performance for FY24. Overall, we've delivered underlying EBITDA of AUD 268 million, and this slide shows the segment breakdown of the full year results. I'll just start briefly by noting the change in segments that we covered off at the half year, and that was our previous processing segment being renamed nutrition and energy. Nutrition and energy now includes what we previously referred to as feeds, fats, and oils. We've included further detail in the appendices on this restatement of segments. Also, just to touch on this slide, for the corporate segment, we've broken out the gain following the liquidation of our UMG holding, and we've also separated out the business transformation costs that Robert just touched on. I'll now move on to slide 19 and provide further detail on the agribusiness segment, starting off with our East Coast Australia business.
Winter grain production in FY24 was 23.5 million tonnes, and that's compared to 29.9 million tonnes in FY23. Overall, we saw lower production and grain handling volumes relative to recent record crops across the East Coast. A key feature of the FY24 crop year was that north-south split with drier conditions across Queensland and northern New South Wales, offset by above-average conditions in southern New South Wales and Victoria. The lower production volumes across the East Coast, as well as global factors, contributed to a softening of margins from recent years. On the grower side, selling pace was slower this year, and then on the demand side, we have seen customers less concerned about supply and disruptions in supply chains, and that's partly off the back of improved global production conditions. Despite these impacts, we've continued to manage the factors in our control with a strong focus on cost management.
It's also pleasing to see a 2% increase in site satisfaction scores compared to the prior year's harvest. Another couple of notes to just touch on. The result in agribusiness includes the impact of the crop production contract with a AUD 59.7 million payment from the FY24 year. This brings net cumulative payments over the five years of the crop production contract to AUD 212 million against a cumulative cap of AUD 270 million. Based on the ABARES's forecast for the FY25 crop, we're expecting to reach that cap in the year ahead. Finally, as Robert touched on earlier, bulk materials handling through our ports made a strong contribution to the ECA result this year, and we're pleased with how that strategy is progressing. Now turning to slide 20 and our international business.
Similar to ECA, our international business saw lower volumes and margins, with the Western Australian crop in particular well below average in FY24. Also, those improved production conditions in key international growing regions had an impact on margins. We did, however, continue to diversify and build on relationships with key international customers, and that's a key driver of long-term value from our multi-origination strategy. Just turning to Canada, we've seen some improvement in earnings from our GrainsConnect joint venture, and it continues to perform well operationally. However, the environment does remain challenging, and we continue to be focused on the performance of that business. I'll now just move to cover off our nutrition and energy segment on slide 21. It's pleasing to report that that strong improvement in crush volumes that Robert covered earlier, with 540,000 tonnes of crush being a 9% increase on the prior year.
This is another example of the ongoing focus we have on delivering operational efficiencies across our assets. As expected and in line with global conditions, we have seen crush margins reduce in the second half of FY24. The lower supply of canola seeds in the East Coast of Australia relative to recent years, as well as lower global vegetable oil values off the back of improved global supply, have been the key drivers in that moderation of margins. Now, just to provide a couple of updates on items we touched on at our half-year results, we ended up recording a small impact to earnings from unplanned maintenance at our West Footscray site, with minimal disruption overall to our customers. As Robert touched on, we've also completed the strategic review of our foods processing plant at East Tamaki, New Zealand, where we took the decision to cease manufacturing.
Overall, this had an impact of approximately AUD 10 million on this year's nutrition and energy earnings from a combination of operating losses and one-off costs. Now moving to slide 22, our animal nutrition volumes benefited from the acquisition of XFA in the second half, and pleasing to see the integration of that business progressing well, and also the second-half contribution of AUD 6.5 million contributing well to the overall earnings in that business. Also, on agri energy, we reported a good increase in sales volumes, mainly driven by increased tallow due to high slaughter rates in the domestic cattle industry. I'll now move to the corporate segment on slide 23. Overall, corporate costs were down compared to FY23, and that's mainly driven by lower spend on growth projects. Underlying corporate costs are largely in line with FY23.
Just one item to touch on here, our effective tax rate this year of 21% is lower than what we typically expect, and that's primarily off the back of recognition of tax losses crystallized following the strategic review of our facility at East Tamaki. I'll now move on to balance sheet and capital management. On slide 25, you can see our balance sheet remains in a really strong position with a core cash balance of $337 million. A couple of items to note in the year, we received gross proceeds of $127 million from the sale of the UMG stake, and that's translated to just over $100 million net after tax. Also to note, in the second half, we had the payment for the acquisition of XF Australia of approximately $39 million. We've included more detail on cash flow movements in the year in the appendices.
Also to note on the table on the right-hand side of this slide, we've seen net debt reduce relative to prior year with a lower closing net debt balance of AUD 99 million, and that's largely as a result of lower commodity inventory at balance date. Overall, our balance sheet is in a very strong position, and that provides us strong flexibility to pursue growth opportunities across our strategy into the future, while also continuing that trend of strong returns back to shareholders. I'll now move on to CapEx on slide 26. Following a period of higher investment in sustaining capital across the business to capitalize on those large harvests on the East Coast of Australia, we've seen a moderation in sustaining capital spend in the year to within our target range.
The increased spend you see here on growth and investments is largely off the back of that acquisition of XFA that we just covered. I'll now move on to slide 27 and capital management. The continued strength of our balance sheet, as well as confidence in the future, enabled the board today to declare a final dividend of AUD 0.24 per share, and that's fully franked. That's made up of a AUD 0.14 ordinary dividend and a AUD 0.10 special dividend, and that brings our dividends for FY24 overall to AUD 0.48 per share, fully franked. The dividends declared today are in addition to the AUD 27 million we've returned through the share buyback we completed this year. We are pleased to continue that trend of strong returns to shareholders, and we've overall delivered AUD 465 million back to shareholders across a combination of dividends and share buybacks over the last four years.
So on that note, I'll now hand back to Robert.
Thanks, Ian. As always in these presentations, it's good to provide an update on our outlook, and in this case, a very positive production outlook that we're seeing in this year, despite some of the challenging margins that we've talked about through financial year 24. The ABARES's September 2024 crop report was a forecast for the current winter crop of 28.8 million tonnes. Importantly, there's a significant reversal of the trend we saw last year, with very strong conditions in the north of Australia, with drier and more variable conditions in the south, and in particular in Victoria, where we expect the canola crop to be 25% down year on year. Overall, that strong volume sets the potential for the year ahead.
In terms of where we're at at the moment, harvest is well underway, and in fact, it's coming much earlier and stronger than we've seen in previous years, as a reflection of no two years are the same. Receivables year to date are 5.8 million tonnes, which is a very strong figure. I was out and about in New South Wales over the weekend, and you can certainly see the strength of the harvest, not just across northern New South Wales, but also through into central New South Wales, and we expect good receivables as harvest progresses through southern New South Wales and into Victoria in the coming weeks. Global crop production is relatively strong, and that means that Australian grain is competing around the world, but pleasingly, there remains strong demand for grain generally.
We do expect that lower crush margin to continue into financial year 2025, and as we've done over recent years, we will provide an earnings update and guidance in our AGM in February of 2025. Over to page 30, and just to recap, we are delivering on our strategy and driving shareholder returns. We've delivered underlying EBITDA of $268 million in financial year 2024. We've completed the acquisition of XF Australia, and that resulted in an increase in our average earnings through the cycle to $320 million. We have a very strong balance sheet with significant flexibility, $337 million in core cash, and we are delivering on that commitment of strong returns to shareholders, over $130 million in capital returns over the last year, including the buyback and the full year dividends of $0.48 per share, fully franked. Thanks for listening in.
At this point, I'll hand back to the moderator, and we look forward to answering any questions you might have.
Thank you very much. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We ask you please limit yourself to one question, and you may require for additional follow-up. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question comes from Apoorv Sehgal with UBS. Please go ahead.
Good morning, Rob and Ian. Thanks for taking the time.
First question, just on the nutrition and energy segment, if you look at the second half of EBITDA of about AUD 58 million, how close is that number to now sort of a fully rebased normal go-forward kind of EBITDA for a half year, especially just taking into account us all that I think the result for the full year does have AUD 10 million of those East Tamaki losses and costs. So presumably that AUD 10 million number sort of doesn't repeat in 2025.
Yeah, I can take that one, Apoorv. So a couple of comments. One thing we have included in the appendix to the presentation this time is a little bit more color on that 320 through the cycle and the breakup between agribusiness and nutrition and energy.
In terms of the second half, it's probably not too far off what you typically expect, and there are a couple of variables, of course. One thing we've spoken about in the past, Apoorv, is that typically we expect the first half to always be stronger than the second half, and that's as a result of just the timing of harvest, availability of seed initially, cost of freight delivery into plants in that period relative to the second half. And as you mentioned, there is a little bit of noise this year with some of the one-offs like the costs relating to the closure of our East Tamaki facility. So hopefully that gives you a little bit of a flavor of some of the moving parts in nutrition and energy.
And the information that Ian refers to in terms of through the cycle is on page 39 of the pack and the appendices of both, and it provides a split around the way we think about through the cycle, but importantly also covers the key drivers across both nutrition and energy and agribusiness, and consistent with what we've talked about before, but just providing, as Ian said, a bit more color on that detail.
Got it. And just on the transformation program, I just wanted to sort of check a couple of things. In terms of the total costs, am I right in saying it's about AUD 90-AUD 100, as in you've got AUD 25 million in FY24 plus a further AUD 50-AUD 60 for release one that's coming, and then plus AUD 15 for release two, because that's the same as release one?
So am I reading that right, AUD 90-AUD 100 as a total over a couple of years?
You're probably a little bit underdone on that, Apoorv. We haven't completed or had the business case approved for release two. So we're just guiding that we would expect that it would be similar in magnitude to release one, so a little more than AUD 15 million, probably more like that, AUD 50-60 type envelope. But I want to be very clear that that business case is still in development. And we're very comfortable with our indication on earnings, but we'll also be looking to whether we can improve the earnings, uplift and improvements as a result of further investment in release two. So what we're currently flagging is AUD 20-30. Just to be clear, that's not in our existing AUD 320 million through-the-cycle.
We'll look to include that and update that as we near completion of the program.
Yep, no, sorry, I misread the release two line. The $20-$30 EBITDA benefit, is that kicking in kind of so after program completion? So we're thinking like FY 2027 is really when that starts, or do you get some sort of benefit earlier?
I would expect you'd see some improvement through probably 2026 rather than the latter part of 2025, but there'll be a ramp up of it. So in terms of a specific answer to your question, you'd expect to see full benefits flow through in that 2027 period post the completion, but we'd like to think that we can front-end a significant part of that and see those start to play into the results 2026 onwards.
Yep. And just one final quick question.
The vast majority of the overall spend here is operating expenditure, rather than CapEx?
The split broadly is 15% CapEx, 85% operating expenditure. Obviously, we manage that very closely and follow the appropriate rules on how to best account for that.
Got it. Okay, thanks for your time, guys. Cheers.
Thank you. The next question is from Owen Birrell with RBC. Please go ahead.
Yeah, thanks, guys. I just wanted to dive a little bit deeper into that nutrition and energy business. Obviously, sort of a new segment for us to sort of delve into. The volume trends looked quite positive year on year, but I noticed that the earnings have really sort of come under pressure, and I'm assuming that's largely pricing and margin-led.
Just wanted to get your views on the current margin environment and whether you think the current margins that we're seeing at the moment are, I guess, mid-cycle, bottom of cycle. Just where should we kind of get a sense of where the margins are for each of the different sub-businesses?
Yeah, sure. I'll make some brief opening remarks then hand across to Ian. We saw exceptionally strong margins through 2022 and 2023 in that space. So we have seen a moderation of that, and we're calling that out in terms of the tougher margin environment. Ian can talk about the sort of factors that drive that, including global supply and demand, which has been a feature, but also crop size in Victoria, which can have an impact.
Ian, do you want to talk about what we're seeing now and the outlook and the opportunity for improvement over time as well?
Yeah. So in terms of the kind of near-term and what's included in our outlook around through the cycle, where we've finished in the FY24 year and in particular the second half is probably around that mid-cycle on balance. As you know, we're really pleased with the kind of underlying growth and volumes, and we like a lot of the fundamentals that underpin it, but we did have benefits over that 2022, 2023 period from a combination of local factors with the volume of supply, but then also offshore factors in terms of global production and other competing origins. So as that has moderated, we're back to more typical levels in nutrition and energy, which is what I would suggest.
Just in terms of, I guess, where you're seeing some of the pricing at the moment, are we at that mid-cycle or are we seeing some weakness coming through the markets?
It's probably hard to tell fully in terms of the look ahead to FY25 at this early stage in the year, but what we're seeing is fairly typical. I think in terms of overall margins, they're a little softer than what we saw at the start of FY24, but in terms of a long-term outlook, they're probably there or thereabouts.
Okay, that's great. Thank you.
I'll just add that, yeah, obviously the crush margin, and we've spoken about this before, is a combination of the seed price, the oil price, and the meal price.
Typically we see those move in conjunction with each other, but there's always volatility, and we look to make the most of that volatility and the opportunity that arises for a large processor like us sitting in the middle.
Maybe another question for me, just in terms of the outlook for the Victorian canola crop, you said it was going to be down 25% year on year. Does that suggest that your canola seed pricing is going to be somewhat higher than what you would normally see?
Again, it's very hard to say what is normal in that respect. Just to be clear, we're calling out what ABARES is forecasting for the crop. We'll get more visibility on that as harvest gets underway in southern New South Wales and Victoria, and it's only really just starting there with some very early receivables.
What it means is that a lower crop means we've got to go slightly further from our major crush facility to get that seed, which means freight increases the price of that seed. The market obviously takes care of the supply and demand considerations, but I'll stress what I said before, the oilseed price in isolation is not the only indicator because typically, an effect of dynamics we see going on in the market at the moment is while oilseed prices up on what you might call average or past rates, it's nowhere near as high as it was a couple of years ago. But as well as the seed price being up a little bit on prior period, the oil price is also up. So we're buying and selling into a market that's moving.
Great, thanks. Thank you.
The next question comes from John Campbell with Jefferies.
Please go ahead. Mr. Campbell, is your line muted?
Sorry, yep, my line was indeed muted. Apologies for that. Just around the comments around sort of global grain production putting competitive pressure on margins. And Ukraine, I think historically has been circa 10% of global production, and obviously the conflict in Ukraine has drove pricing up to high levels. It's come back a fair bit for most grains. But if by chance that conflict starts to settle itself out, could that potentially add significant production back into the system, or are we really already seeing Ukraine back online as a normal supplier?
I mean, John, it's a really good question. Short answer is, yeah, as horrific as that is, as a humanitarian crisis and the challenges that people in Ukraine are facing, the impact on crop production is baked into current and future production.
The overall Black Sea output, including the Russian crop, is relatively favorable in terms of from a production point of view, and the split between Ukraine and Russia has changed over time. What I would say is Ukraine has done an incredibly good job of keeping grain moving through other channels, particularly through to Europe and North Africa and those sorts of areas. So as much as all of us, I'm sure, would like to see that conflict come to an end, I'm not sure it's going to have a significant impact on supply-demand dynamics or pricing of grain. Would be my overall comments. Just more broadly in terms of the comments we're making about supply and demand and therefore margins around the globe, there's no major concerns about supply. There's no callouts in terms of bumper crops anywhere, but there's no major disruption or drought.
We have seen more volatility over recent years, so it's inevitable that supply will get disrupted at some point, and that generally does create opportunities. Given demand is reasonably predictable and in fact growing reasonably well, and food, of all the soft commodities or all commodities, is relatively resilient irrespective of economic times around the world because people always need to eat, and we're also seeing increasingly the stronger correlation and demand signal coming from the agri-energy sector, so I think really what we're saying is that we've seen a moderation and arguably a slight overcorrection of the conditions that we saw through 2022 and 2023. As a result, farmers are generally not racing into the market to sell. Buyers are not looking to buy ahead because there's no major concerns around supply, but as the year plays out, inevitably demand will continue to grow.
Sales or buying opportunities for grain will occur through harvest, and we would expect to see margins develop. The other pointer I'd make is that if you look at the commentary from other large agri-businesses around the globe, they're all talking about a more positive outlook through 2025, commenting that conditions at the moment remain relatively consistent with what we've seen over the last half.
That's really helpful. Thanks for that, Rob. Just one last question, if I could. Just around the SAP end-of-life, effectively modernizing the systems. I mean, can you just sort of give us a quick view on the risks around SAP replacement? I mean, we've all heard horror stories about SAP implementations and re-engineering. I mean, do you see it as a particularly high risk from a GrainCorp perspective?
Short answer is no.
The reason for that is we have invested significantly, as you've seen in our result, in the design and planning phase to make sure that we clearly understand the risks and can contain and manage those very well. Included in that investment and preparation is the governance layers we've put in place to manage both the timeframes, the budget, and the resourcing and expertise that we have in place. Finally, we've taken a very measured approach in terms of the release phasing to make sure that the overall business is not impacted by any disruption that could occur through that. We're very comfortable that the approach we've taken is best in class, and we will continue to monitor that closely.
I think the broader comment I'd make is, as we've called out today, the significant improvements we expect to get from this program more broadly as part of a wider transformation that we're flagging at AUD 20 million-AUD 30 million makes us an investment rather than a drag over the years ahead, and as you say, we are cognizant of the challenges of these programs, but the business is in a very strong position to take on that sort of opportunity at this point in time.
Great. Thanks very much for that, Rob.
Thank you. The next question comes from James Ferrier with Wilsons Advisory. Please go ahead.
Good morning, Rob and Ian. Thank you for your time.
Can I first of all ask you about the GrainsConnect business and what your updated view is there on the outlook for that business, its current earnings profile relative to where your existing assumptions sit on its contribution through the cycle? Ian, do you?
Yeah, look, I'll get Ian to make some comments on that. One of the opportunities we've had through this year is to not just critique and look at every part of our business, but also to get an understanding as to what's going on in the broader market. We remain very comfortable that we have high-quality assets that are operating well, and our performance in that market is no different to the sorts of challenges that others are facing as a result of squeeze between capacity and production of grain in Canada.
The good thing in terms of the outlook is, just like in Australia, grain output is growing in Canada, so this will correct over time. Ian, you might be able to talk about the timeframe on that and the relativity to our through-the-cycle assumptions.
Yeah, so just a couple of quick comments, James. So pleasing to see an uplift in performance, but still a fair gap to our assumption and through-the-cycle. We've previously talked about expecting to get effectively our bottom line benefit of in the order of AUD 10 million. So still a way to go to get to that. In terms of how long we expect that to take to correct, there's a few factors at play. There's obviously the supply side in terms of crop conditions in Canada itself, and we've seen these be average to below average across most of the recent years.
And then there's some of the global dynamics that are impacting markets in Australia and more broadly, and the Canadian environment's facing those margin pressures as well from global production and from grower selling pace. Those sort of same dynamics that are impacting our global competitors also impacting Canada. So it's a question of timing, but we do still have confidence in the quality of the assets, the overall fundamentals of that business, and the supply from that part of the world into our key customer markets.
The other aspect, James, in terms of grain crush is we have seen retirement and mothballing of some capacity in that market by other participants. And given that we've got very modern and efficient assets, it's good to see some of those older assets be retired, which will help the capacity side of the equation there.
Look, further to comments we've made previously, the relatively small position that we have in Canada is important to our international business and the strategic benefit it brings to our global customers in terms of de-risking and diversifying away from solely Australian supply. That does allow us to form long-term relationships with high-value customers from a demand point of view. Notwithstanding that, as we've indicated, we're very strongly focused on making sure all parts of the business perform strongly, including continuing to drive that improvement in Canada.
Thanks, Rob. Second question I wanted to ask about was the agri-energy part of the business and what your outlook or what your expectations are for the outlook into FY25, particularly around pricing for UCO and tallow.
Yeah, might get Ian to comment on that in terms of what we're seeing.
Yeah, it's probably a tough one to answer because we've seen quite a bit of volatility over the last few years in that. Probably what I would say though is the long-term fundamentals are really strong for the demand for those products into renewable fuel demand. So we do like those long-term fundamentals. Prices will move around in the short term based on what's going on globally, based on development of broader demand signals more globally. So we'll continue to keep an eye on all of that. It's harder to have a strong view in the short term, but certainly long-term, very favorable outlook on it. I think it just is a theme. If you look at the volatility and movement in markets that we've alluded to, that it occurs over periods of time, but also week to week in some cases.
Over a number of years now, GrainCorp has demonstrated real discipline in being able to navigate that volatility and in fact creating opportunities from it, so that's one of the things that we do well, and the frameworks we have in place ensure we make the most of those opportunities.
Thanks, Rob, and then last one from me, and I appreciate your earlier comment that every harvest is different, but did I hear you describe this current harvest as tracking earlier? I mean, I'm just sort of perhaps I didn't pick it up, but whether you're referencing that to sort of earlier than normal or earlier than last year and how you've phrased that up?
Yeah, it's certainly well earlier than last year, and that's mostly a geographic factor.
Typically, in any year, you'll see the winter crop harvest start in Queensland and roll south over a six to eight-week period. Typically, it's a sort of timeframe we'd estimate around that. The other factor that we've seen, and relative to certainly all recent harvests over the last four or five years, is we've seen very favorable conditions in northern New South Wales and Queensland with good weather, good rainfall, very strong crops, and then pleasingly a good run of dry weather into the ripening period leading up to harvest. So as a result, even over and above the geographic driver that you'd see, we've seen harvest come in earlier and stronger than typical. But I do want to stress one of the things we always talk about is there's no such year as an average year in agriculture.
But if you look at our weekly updates and harvest receivals, you'll see a very consistent and strong performance day by day and week on week in terms of the volumes we're receiving in. And that's a good place to be because it allows us to meet the expectations of growers, manage the cost of harvest, and ultimately an early and a quick harvest is a good thing because it then allows us to focus on the big export tasks that follow through the 12 months of the year while we manage the challenges and the opportunities of the harvest period, which occurs over that six to eight or two-month period, six to eight-week or two-month period. Hopefully, it gives you just a bit of insight, James, and helps.
Yeah, no, it does. That's great, Ian. Thanks, Rob.
Thank you. The next question comes from Ben Wedd with Macquarie.
Please go ahead.
Hi, Rob and Ian. Thanks for taking my question. Just sort of looking at the balance sheet there, and congratulations on the strong Core cash position again. Can you sort of talk us through how you're thinking more broadly about some of the growth opportunities, particularly with the feeds business, take the XF feeds acquisition that you completed this year, but sort of what else is there in the environment that you can see that gets you interested in that space?
Yeah, sure.
Look, as always, we're not going to be drawn on specific targets, but I think the XF Australia acquisition at AUD 35 million and earnings contribution of at least AUD 10 million a year is indicative of the sort of opportunities that we're looking for, and we'd like to be able to, on an ongoing basis, find incremental and programmatic type opportunities for inorganic growth like that. More importantly, though, I think the platform we now have across our existing feeds business, which includes those liquid feeds and molasses-based feeds and technological solutions, including opportunities around methane-reducing additions and those sorts of things, provides a really strong platform for innovation and growth across that sector. And it's also very complementary to the significant volume that we do through canola meal and that aspect of our overall feeds portfolio.
So I think in terms of the balance sheet, we'd like to flag opportunities for relatively small capital investment in terms of growth and enhancement of our existing and recently acquired assets. And in many cases, it's good to have been able to identify opportunities for growth in that business, given the fundamentals I shared with you earlier around cattle on feedlot and similar types of metrics in Australia. But also on an ongoing basis, we'll look at similar type bolt-on acquisitions in that space as we develop that portfolio.
Yeah, great. Great. Thanks, Ian. And then maybe just to follow on from that question, appreciate the dividend announcement today and the healthy level of capital returns to shareholders.
But with the sort of agri-energy CapEx being sort of many years down the road, do you think there's scope for further capital management and utilization of the balance sheet in that regard?
Look, I'll come back to the comment that we've been making around our commitment to investment in the business across those strategic areas we've touched on: agri-energy, feed, and food and primary stage processing. So certainly opportunities to invest in the business and continue to do so with a strong enough balance sheet to accommodate that to a pretty significant level. And also to provide strong returns to shareholders. You'll notice that we've provided both an ordinary and special dividend. And the reason we've done that is to flag that the ordinary dividend effectively underpins our confidence and through-the-cycle earnings.
And that remains, I think, good logic associated with our capital management framework, which is also in the appendices of the pack. So given the capital management framework calls for minimum core debt, although we don't define exactly what minimum core debt is, it depends on where you're at in the cycle and earnings. But post the merger, we were carrying close to AUD 100 million of debt. So it demonstrates that with a core cash position of over AUD 300 million, we've got plenty of capacity for significant investment in and associated with the business alongside ongoing strong returns to shareholders. And that optionality for the board to consider is a great place for the business to be in.
Great. Thank you very much.
Thank you. The next question comes from Scott Ryall with Rimor Equity Research. Please go ahead.
Thank you very much. Just two quick ones from me.
In terms of the non-grain business that you've given us a little bit more color on today, and appreciate that. I wonder if you could just refresh us on what you believe is your competitive advantage and how big the opportunity you think is, just in terms of utilizing the spare capacity that you have and smoothing out the earnings that you've spoken to.
Yeah, sure, Scott. It's Robert here. We have seven ports, bulk ports across the coast of Australia, throughout Victoria, New South Wales, and Queensland. So in that respect, they are strategic assets that are linked into our integrated value chain and upcountry network of storage sites. But they're also privileged assets in respect that there is only limited space in port zones in Australia. So I think that's the significant inherent value in those assets.
The reason that we handle bulk materials and the reason we're able to do that without impacting our ability to export grain is it takes between six and seven days using trains and trucks to satisfy the volume of grain we need to load out a bulk vessel of grain, which we can do in a couple of days, sort of 36-48 hours in terms of loading speed. So that means every week, and it doesn't work like this every week, but over a period of time, we have a very large number of days to be able to utilize the port space and land we have to accumulate imports or exports in those bulk materials that are non-grain and utilize the capacity and storage space we have at port. So that's fundamentally what the opportunity is about.
The way we've been able to grow not just the volume of that, but the margin is by leveraging that capability and valuable assets that we have. In terms of the second part of your question, in terms of outlook, we would expect to grow at a similar rate. The benefits we've achieved over the last couple of years in margin in particular, as we rebalance that portfolio and look at making sure that we're not just focused on growing volume, but growing the most valuable volume. We're actively exploring at some of the ports similar expansions, typically at very low investment, given the capacity already exists there. Similar commodity portfolios is what we're already handling across the overall asset base.
Thank you. There are no further questions at this time. I would now like to hand the call back to Mr. Spurway for closing remarks.
Thank you.
And thank you again for joining us on this morning's call. I know that we've got one-on-one meetings with a number of investors and analysts over the next days and into next week. So we look forward to catching up with all of you. And again, to recap, we're delighted to report the result today and in particular to demonstrate the very strong position and balance sheet that GrainCorp is presenting. Thanks again and have a great day ahead, everyone.
This concludes today's presentation. Thank you for your participation. You may now disconnect your lines.