A harsh Canadian drought has battered United Malt, the world’s fourth-largest supplier of malt to the beer and whisky industry, sending its share price plummeting more than 17 per cent after it was forced to downgrade profit forecasts.

supply chain complications causing shipment delays to customers, and high energy prices have eaten into United Malt’s profit margins.

However, the global supplier remains optimistic, with the certainty of “a very good crop”, for the year ahead.

Three months ago, the ASX-listed company forecast underlying earnings of $115 million to $140 million for the year ending September 30, but in a trading update today lowered expectations to between $100 million and $108 million.

United Malt chairman Graham Bradley said the board was disappointed with the company’s performance this year and “external conditions ha[d] deteriorated dramatically”.

“Higher energy prices and supply chain issues are likely to remain challenging for the foreseeable future as will the impacts of climate on our business,” said Bradley.

The Vancouver-based company’s net debt-to-EBITDA ratio will also be double or 2.5 times its target range, and the company has been “in discussions” with its banks regarding its lower-than-expected earnings.

However, it is much more upbeat about prospects for the 2023 financial year, forecasting a rise in underlying earnings in the range of $140 million to $160 million.

United Malt CEO Mark Palmquist said the positive outlook was due to the “certainty of the crop production and quality” now emerging from Canada and North America.