November 1, 2018 / 5:06 AM / a year ago

UPDATE 1-Graincorp to cut jobs in eastern Australia unit because of drought

(Adds details on drought; effects on earnings and share movement)

Nov 1 (Reuters) - Graincorp said on Thursday it planned to cut jobs at its eastern Australia grains unit after a devastating drought in the area severely hampered the region’s grain harvest.

Australia’s biggest listed bulk grain handler said in a statement it would streamline operations and reduce management layers to cut costs.

The drought is expected to cut eastern Australia’s crop production this year to less than half its average over the past 20 years, with the state of New South Wales to be the worst hit, the country’s agricultural commodities forecaster warned last week.

While the company recently raised its fiscal 2018 earnings guidance, it also warned of further headwinds for its grains business in eastern Australia.

Graincorp shares fell 1 percent in the immediate aftermath of the announcement and are down 1.8 percent at 0458 GMT, compared with a largely flat benchmark.

Reporting by Ambar Warrick in Bengaluru; Editing by Christian Schmollinger

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