TORONTO, June 4, 2015 /CNW/ - Ceres Global Ag Corp.
(TSX: CRP) ("Ceres" or the "Corporation") today announced its
financial and operational results for the three and 12 months ended
March 31, 2015.
The Corporation recognized a net loss for the year of
$1.4 million, an improvement of
$17.9 million compared to the year
ended March 31, 2014. During the
quarter ended March 31, 2015, the
Corporation commenced grain operations at its Northgate facility,
as construction on the high-speed grain elevator is progressing on
budget and on schedule.
Financial Results:
(in CAD)
|
Three Months
Ended March 31,
2015
|
Three Months
Ended March 31,
2014
|
Twelve Months
Ended March 31,
2015
|
Twelve Months
Ended March
31,
2014
|
Revenue
|
$54.5
million
|
$33.5
million
|
$192.8
million
|
$232.4
million
|
Gross profit
(loss)
|
($0.2
million)
|
$3.7
million
|
$11.7
million
|
$4.4
million
|
Income (loss) from
operations
|
($2.5
million)
|
$2.4
million
|
$1.0
million
|
($12.9
million)
|
Net income
(loss)
|
($3.5
million)
|
$0.4
million
|
($1.4
million)
|
($19.3
million)
|
Earnings (loss) per
share basic and fully diluted
|
($0.13)
|
$0.03
|
($0.08)
|
($1.35)
|
EBITDA (loss)
1
|
($1.6
million)
|
$3.1
million
|
$3.6
million
|
($12.8
million)
|
Highlights:
- Gross profits for the year ended March
31, 2015 (YE 2015) were $11.7
million compared to $4.4
million for the fiscal year ended 2014 (YE 2014) driven by
increased net trading margins;
- General and administrative expenses were $10.7 million for YE 2015 compared to
$17.2 million for YE 2014,
representing a reduction of $6.5
million;
- Commencement of grain operations at Northgate during the
quarter ended March 31, 2015 handling
1.7 million bushels of grain;
- Through May 31, 2015, the
Corporation has loaded 544 railcars of grain at Northgate;
- Subsequent to quarter end, Ceres announced an agreement with a
subsidiary of Parkland Fuel Corporation (TSX: PKI) for transloading
propane at Northgate. Going forward, the Company anticipates
Northgate could facilitate the transloading and shipment of
additional payloads such as fertilizers or oil-based
materials.
- Through May 31, 2015, the
Corporation has loaded 109 railcars of propane at Northgate.
- Subsequent to quarter end, on May 29,
2015, the Corporation entered into an agreement to sell its
Electric Steel grain facility in Minneapolis, Minnesota, to the University of Minnesota for gross proceeds of
US$1,450,000, subject to final
approval by the University's Board of Regents. The Corporation is
expecting to close on the sale in the first quarter of fiscal 2016.
As at March 31, 2015, the carrying
value of the related facility's property, plant and equipment
totaled approximately US$1,300,000
(CAD$1,643,460).
- Subsequent to quarter end, on June 4,
2015, the Corporation's Board of Directors approved the
commencement of a normal course issuer bid ("NCIB"), subject to
acceptance by the Toronto Stock Exchange (the "TSX"). Pursuant to
the NCIB, the Corporation proposes to purchase through the
facilities of the TSX, from time to time over the next 12 months,
if considered advisable, up to a maximum aggregate of 1,614,730
common shares of the Corporation, being approximately 10% of its
unrestricted public float as of June 4,
2015, subject to a maximum aggregate purchase price of
$5 million pursuant to restrictions
under the Corporation's credit agreement.
"Our fourth quarter and fiscal year were transformational
periods for Ceres," said Ceres chief executive officer Patrick Bracken. "Northgate is now operational
and starting to diversify the products it handles. Looking ahead,
we anticipate that this strategic asset will become a cornerstone
of our company and a significant catalyst for greater value
creation for shareholders."
Financial Highlights:
Ceres is principally involved in an agricultural commodity-based
business, in which changes in selling prices generally move in
relation to changes in purchase prices. Therefore, increases or
decreases in prices of the agricultural commodities that the
business deals in will have a relatively equal impact on sales and
cost of sales and a minimal impact on gross profit.
Accordingly, management believes it is more important to
focus on changes in gross profit than it is to focus on changes in
revenue.
Gross profit for the year ended March 31,
2015 was $11.7 million
compared to $4.4 million in 2014. For
the year ended March 31, 2015, gross
profit percentage was 6.1% versus 1.9% in 2014.
The increase in gross profit for the year ended March 31, 2015 compared to 2014 was primarily
driven by an increased trading margin, and an increase in storage
and rental income. Both were slightly offset by increases in
operating expenses.
For the quarter ended March 31,
2015, gross profit was a loss of $0.2
million compared to gross profit of $3.7 million in the fourth quarter of 2014. For
the quarter ended March 31, 2015,
gross profit percentage was negative 0.4% versus 11% in the fourth
quarter of 2014 due to static values on premium quality grain along
with contracting grain for October/November delivery at Northgate
that did not ship until January/February, as the Corporation sold
into a weaker market during the fourth quarter ended March 31, 2015. However, this loss was an initial
one-time start-up opportunity cost.
For the year ended March 31, 2015,
general and administrative expenses totalled $10.7 million, which represented a decrease
compared to prior year of $6.5
million, or 62%. The reduction in fiscal year 2015 compared
to fiscal 2014 was due to the recognition in the prior year of
expenses relating to the termination of the Corporation's
management agreement with Front Street Capital (Front Street). In
fiscal 2014, the Corporation recorded provisions for $5.0 million for the management transition
payment that was made on October 1,
2013 to Front Street, and $1.4
million for contingent additional payments to Front Street,
totalling $6.4 million.
For the quarter ended March 31,
2015, general and administrative expense totaled
$2.2 million versus $1.3 million in the fourth quarter of 2014.
General and administrative expense for fiscal quarter four of 2014
was less due to the reduction in fair value of the Corporation's
liability of future payments to Front Street relating to the
termination of the management agreement. Excluding items relating
to the termination of the management agreement, general and
administrative expenses incurred as part of normal business
operations were comparable from fiscal quarter four of 2014 to
2015.
Consolidated EBITDA was $3.6
million for the year ended March 31,
2015 compared to a loss of $12.8
million for the prior year. The increase in EBITDA was
driven by increased gross profit and net trading margins.
Consolidated EBITDA for the quarter ended March 31, 2015 was a loss of $1.6 million compared to EBITDA of $3.1 million for the same quarter a year ago.
Consolidated net loss was $1.4
million for the year ended March 31,
2015 compared to a net loss of $19.3
million for the prior year. For the quarter ended
March 31, 2015, net loss was
$3.5 million compared to net income
of $0.4 million during the same
quarter of 2014.
Outlook
Subsequent to March 31, 2015, the
Corporation expanded its operations by opening a grain
merchandising office in southeastern Ontario, which will play a key role in
extending the Corporation's trading and merchandising reach into
Ontario and the eastern Canadian
markets, and enhance the utilization of the Port Colborne, Ontario, facility. Furthermore,
the Corporation has expanded its existing hard wheat trading
portfolio with the addition of key personnel, which will allow the
Corporation to expand its geographic procurement and merchandising
reach throughout North America.
Management expects that these two expansions, coupled with a full
year of Northgate grain origination, and other strategic
initiatives will contribute positively to the Corporation's net
earnings in fiscal 2016.
In addition, the Corporation's logistics-related initiatives
anchor on the strategic geographic location of Northgate, which is
located in a prime area to facilitate the movement of oil and
natural gas from Canada to
the United States. Under the
Corporation's strategic propane transloading agreement, the
Corporation unloads propane from inbound trucks loading it into
railcars for shipment into the US market via the BNSF Railway from
Northgate, Saskatchewan. This
provides a direct link and an added access point for propane to
enter the US market. Management expects this business to grow
throughout fiscal year 2016.
Conference Call Details
The Corporation will hold a conference call to discuss fourth
quarter and fiscal 2015 results on Friday,
June 5, 2015 at 11:00 a.m.
EST. Patrick Bracken,
President and CEO, and Mark Kucala,
CFO, will co-chair the conference call.
All interested parties can join the conference call by dialing
1-888-231-8191 or 647-427-7450, conference ID: 42641103.
Please dial in 15 minutes prior to the call to secure a line.
The conference call will be archived for replay until Friday, June 19, 2015 at midnight, ET. To access
the archived conference call, please dial 1-855-859-2056 and enter
the encore code 42641103.
A live audio webcast of the conference call will be available at
www.newswire.ca. Please connect at least 15 minutes prior to the
conference call to ensure adequate time for any software download
that may be required to join the webcast. An archived replay of the
webcast will be available for 365 days.
Non-IFRS Financial Measures
1EBITDA (Earnings before Interest, Taxes,
Depreciation and Amortization) is not a standardized financial
measure prescribed by IFRS; however, is one metric that is used by
management to determine the Corporation's ability to service its
debt and finance capital. EBITDA excludes gains and losses on
property, plant and equipment and assets held for sale, as these
items are considered to be non-reoccurring in nature.
In calculating EBITDA, Ceres excludes its share of the net
income (loss) from investments in associates and the gain (loss) on
sale or impairment of property, plant and equipment. Ceres may
calculate EBITDA differently than other companies; therefore,
Ceres' EBITDA may not be comparable to similar measures presented
by other issuers.
Investors are cautioned that EBITDA should not be construed as
alternatives to net income or loss, or to other standardized
financial measures determined in accordance with IFRS, and are not
intended to represent cash flows or results of operations in
accordance with IFRS.
About Ceres Global Ag Corp. (ceresglobalagcorp.com)
Ceres Global Ag Corp. is a Toronto-based company focused on two primary
businesses: a Grain Storage, Handling and Merchandising unit,
anchored by its 100% ownership of Riverland Ag Corp., and a
Commodity Logistics unit, containing its 25% interest in Stewart
Southern Railway Inc. and its development of the Northgate, SK
Commodity Logistics Centre. Riverland Ag Corp. is a collection of
nine (9) grain storage and handling assets in Minnesota, New
York, and Ontario having
aggregate storage capacity of approximately 47 million bushels as
at March 31, 2015. Riverland Ag also
manages two (2) facilities in Wyoming on behalf of its customer-owner.
Stewart Southern Railway Inc. is a short-line railway with a range
of 130 kilometres that operates in South-eastern Saskatchewan. The Northgate Commodities
Logistics Centre is a state-of-the art grain, oil and oilfield
supplies transloading site being developed in conjunction with
Riverland Ag and several potential energy company partners,
connected to BNSF Railway.
Cautionary Notice: This news release contains
"forward-looking information" within the meaning of applicable
Canadian securities legislation and United States securities laws. Forward-looking
information may include, but is not limited
to, statements regarding future operations and results,
anticipated business prospects and financial performance of Ceres
and its subsidiaries, including the plans, costs, timing and
capital for the development of the Northgate Commodities Logistics
Centre, expectations or projections about the future, strategies
and goals for growth, expected and future cash flows, costs,
planned capital expenditures, regulatory change, general economic
political and market conditions anticipated capital projects,
construction and completion dates, operating and financial results,
critical accounting estimates, the expected financial and
operational consequences of future commitments. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate",
"believes", "may have implications" or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will be taken", "occur", or
"be achieved". Forward-looking information is based on the opinions
and estimates of management at the date the information is made,
and is based on a number of assumptions and subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking information. Key assumptions
upon which such forward-looking information is based are
listed in the "Forward-Looking Information" section of the interim
MD&A for the year and quarter ended March 31, 2015. Many such
assumptions are based on factors and events that are not within
the control of Ceres and there is no assurance they will prove to
be correct. Factors that could cause actual results to vary
materially from results anticipated by such forward-looking
information include, among others, risks related to weather,
politics and governments, changes in environmental and other laws
and regulations, competitive factors in agricultural, food
processing and feed sectors, construction and completion of capital
projects, labour, equipment and material costs, access to capital
markets, interest and currency exchange rates, technological
developments, global and local economic conditions, the ability of
Ceres to successfully implement strategic initiatives and whether
such strategic initiatives will yield the expected benefits, the
ability of Ceres to successfully defend the claim by The Scoular
Company, the operating performance of the Corporation's assets, the
availability and price of commodities and regulatory environment,
processes and decisions. Although Ceres has attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking information, there may be other factors that cause
actions, events or results that are not anticipated, estimated or
intended. There can be no assurance that forward-looking
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Ceres undertakes no obligation to update
forward-looking information if circumstances or management's
estimates or opinions should change, except as required by
applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking information.
CERES GLOBAL AG
CORP.
|
|
Consolidated
Balance Sheets
|
|
|
March
31,
|
March
31,
|
|
2015
|
2014
|
ASSETS
|
|
|
Current
|
|
|
|
Cash
|
$
|
5,136,032
|
$
|
12,009,400
|
|
Portfolio
investments
|
848,163
|
848,163
|
|
Due from
Brokers
|
8,641,335
|
4,620,007
|
|
Derivatives
|
9,472,984
|
2,965,891
|
|
Accounts receivable,
trade
|
7,910,824
|
6,757,757
|
|
Inventories,
grains
|
147,940,077
|
113,320,466
|
|
Sales taxes
recoverable
|
1,137,391
|
1,469,543
|
|
Income taxes
recoverable
|
-
|
58,465
|
|
Assets held for
sale
|
-
|
18,233,455
|
|
Prepaid expenses and
sundry assets
|
1,410,699
|
1,477,376
|
Current
assets
|
182,497,505
|
161,760,523
|
Investments in
associates
|
5,619,412
|
4,625,667
|
Intangible
assets
|
379,260
|
331,650
|
Investment
property
|
-
|
14,803,988
|
Property, plant
and equipment
|
120,450,079
|
50,687,083
|
Non-current
assets
|
126,448,751
|
70,448,388
|
TOTAL
ASSETS
|
$
|
308,946,256
|
$
|
232,208,911
|
|
|
|
LIABILITIES
|
|
|
Current
|
|
|
|
Bank
indebtedness
|
$
|
18,736,400
|
$
|
71,746,950
|
|
Accounts payable and
accrued liabilities
|
17,388,202
|
7,567,634
|
|
Repurchase
obligations
|
18,635,451
|
15,941,080
|
|
Derivatives
|
2,607,280
|
1,752,256
|
|
Provision for future
payments to Front Street Capital
|
344,000
|
970,000
|
|
Warrants
|
1,719,000
|
-
|
Current
liabilities
|
59,430,333
|
97,977,920
|
Long-term
debt
|
30,381,310
|
-
|
Deferred income
taxes
|
296,971
|
156,534
|
Non-current
liabilities
|
30,678,281
|
156,534
|
TOTAL
LIABILITIES
|
90,108,614
|
98,134,454
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Common
shares
|
208,884,960
|
137,100,022
|
|
Deferred share
units
|
319,820
|
62,500
|
|
Contributed
surplus
|
9,228,422
|
9,228,422
|
|
Currency translation
account
|
22,179,246
|
8,072,943
|
|
Deficit
|
(21,774,806)
|
(20,389,430)
|
TOTAL
SHAREHOLDERS' EQUITY
|
218,837,642
|
134,074,457
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
|
308,946,256
|
$
|
232,208,911
|
CERES GLOBAL AG
CORP.
|
Consolidated
Statements of Comprehensive Income (Loss)
|
For years ended
March 31, 2015 and 2014
|
|
|
|
|
|
|
|
|
|
2015
|
2014
|
REVENUES
|
$
|
192,765,006
|
$
|
232,353,830
|
Cost of
sales
|
(181,073,981)
|
(227,982,570)
|
GROSS
PROFIT
|
11,691,025
|
4,371,260
|
General and
administrative expenses
|
(10,742,873)
|
(17,227,514)
|
INCOME (LOSS) FROM
OPERATIONS
|
948,152
|
(12,856,254)
|
Finance
loss
|
(188,963)
|
(2,918,839)
|
Finance
expenses
|
(2,906,495)
|
(4,717,551)
|
Loss on impairment of
assets held for sale
|
-
|
(763,201)
|
Gain on sale of
property, plant and equipment
|
-
|
199,540
|
LOSS BEFORE INCOME
TAXES AND UNDERNOTED ITEM
|
(2,147,306)
|
(21,056,305)
|
Income taxes
(recovered)
|
419,315
|
(1,322,628)
|
LOSS BEFORE
UNDERNOTED ITEM
|
(2,566,621)
|
(19,733,677)
|
Share of net income
in investments in associates
|
1,181,245
|
463,700
|
LOSS FOR THE
PERIOD
|
(1,385,376)
|
(19,269,977)
|
Other
comprehensive gain for the period
|
|
|
Gain on translation
of foreign currency accounts of foreign operations
|
14,106,303
|
9,365,847
|
TOTAL
COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD
|
$
|
12,720,927
|
$
|
(9,904,130)
|
|
|
|
WEIGHTED-AVERAGE
NUMBER OF SHARES FOR THE PERIOD
|
18,360,019
|
14,260,601
|
LOSS PER
SHARE
|
|
|
Basic
|
$
|
(0.08)
|
$
|
(1.35)
|
Diluted
|
$
|
(0.08)
|
$
|
(1.35)
|
|
|
|
Supplemental
disclosure of selected information:
|
|
|
Depreciation included
in Cost of sales
|
$
|
2,742,253
|
$
|
2,843,568
|
Depreciation included
in General and administrative expenses
|
$
|
79,470
|
$
|
156,167
|
Amortization of
financing costs included in Finance expenses
|
$
|
742,445
|
$
|
530,988
|
Personnel costs
included in Cost of sales
|
$
|
1,663,530
|
$
|
1,527,417
|
Personnel costs
included in General and administrative expenses
|
$
|
520,687
|
$
|
442,982
|
CERES GLOBAL AG
CORP.
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
For the years
ended March 31 2015 and 2014
|
|
|
|
|
|
|
|
|
2015
|
2014
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
Net loss for the
period
|
$ (1,385,376)
|
$ (19,269,977)
|
Adjustments
for:
|
|
|
|
Depreciation of
property, plant and equipment
|
2,821,723
|
2,999,735
|
|
Revaluation of
warrants conditionally issued
|
75,000
|
-
|
|
Realized loss on sale
of investments
|
-
|
2,974,760
|
|
Unrealized increase
in fair value of investments
|
-
|
(513,896)
|
|
Loss on assets held
for sale
|
-
|
763,201
|
|
Realized gain on sale
of property, plant and equipment
|
-
|
(199,540)
|
|
Finance
expenses
|
2,906,495
|
4,717,551
|
|
Income tax expense
(recovery)
|
419,315
|
(1,322,628)
|
|
Deferred share units
issued to Directors and fair value adjustment
|
276,032
|
62,500
|
|
Share of net income
in investments in associates
|
(1,181,245)
|
(463,700)
|
Changes in non-cash
working capital accounts
|
(24,014,566)
|
79,030,214
|
Interest
paid
|
(2,471,290)
|
(4,634,761)
|
Income taxes
recovered (paid)
|
(170,017)
|
955,867
|
Cash flow provided
by (used in) operating activities
|
(22,723,929)
|
65,099,326
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
Proceeds from
disposition of assets held for sale
|
6,759,240
|
-
|
Proceeds from sale of
investments
|
-
|
3,189,928
|
Dividend received
from associate
|
187,500
|
125,000
|
Repayment of loan
receivable from associate
|
-
|
62,500
|
Acquisition of, and
costs capitalized on, investment property
|
(5,052,271)
|
(9,806,713)
|
Proceeds from sale of
property, plant and equipment
|
-
|
1,549,940
|
Acquisition of
property, plant and equipment
|
(24,444,302)
|
(2,509,343)
|
Cash flow used in
investing activities
|
(22,549,833)
|
(7,388,688)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
Net proceeds from
(repayment of) bank indebtedness
|
(56,885,000)
|
(52,670,000)
|
Proceeds from term
loans
|
29,065,000
|
-
|
Net repayment of
repurchase obligations
|
365,329
|
(12,939,394)
|
Financing costs
paid
|
(1,933,734)
|
(105,340)
|
Proceeds from common
shares issued
|
75,000,000
|
-
|
Share issuance
costs
|
(1,571,062)
|
-
|
Deferred share units
redeemed
|
(18,712)
|
-
|
Repurchase of common
shares under normal course issuer bid
|
-
|
(964,424)
|
Cash flow provided
by (used in) financing activities
|
44,021,821
|
(66,679,158)
|
Foreign exchange
cash flow adjustment on accounts
|
|
|
|
denominated in a
foreign currency
|
(5,621,427)
|
534,084
|
Increase
(decrease) in cash for the period
|
(6,873,368)
|
(8,434,436)
|
Cash, beginning of
period
|
12,009,400
|
20,443,836
|
Cash, end of
period
|
$ 5,136,032
|
$ 12,009,400
|
SOURCE Ceres Global Ag Corp.