TORONTO, Nov. 5, 2015 /CNW/ - Ceres Global Ag Corp.
(TSX: CRP) ("Ceres" or the "Corporation") today announced its
financial and operational results for the three and six months
ended September 30, 2015.
Financial Results:
(in CAD)
|
Three Months
Ended
September 30,
2015
|
Three Months
Ended
September 30,
2014
|
Six Months
Ended
September 30,
2015
|
Six Months
Ended
September 30,
2014
|
Gross
profit
|
$1.5
million
|
$5.3
million
|
$3.4
million
|
$6.5
million
|
Income (loss) from
operations
|
($1.1
million)
|
$2.4
million
|
($1.7
million)
|
$0.2
|
Net income
(loss)
|
$0.1
million
|
$1.9
million
|
($1.6
million)
|
($0.2)
|
Earnings (loss) per
share basic and fully diluted
|
-
|
$0.13
|
($0.06)
|
($0.01)
|
EBITDA
1
|
$1.3
million
|
$3.2
million
|
$1.3
million
|
$1.4
million
|
Financial and Operational Highlights:
- Net income of $0.1 million for
the second quarter 2015 compared to $1.9
million for the same quarter 2014
- Incurred $1.4 million in
operating expenses at Northgate for the six-month period ended
September 30, 2015, with $0.7 million being incurred for the second
quarter 2015; there was no comparable expenses in the prior year as
this is and will be the first full fiscal year of operating
Northgate;
- Gross profits $1.5 million
compared to $5.3 million for the
second quarter of 2015;
- General and administrative expenses totaled $2.5 million, which represents a decrease of
$0.4 million from the same quarter a
year ago;
- Enhanced the utilization of its core terminal assets by
handling nearly 8 million bushels of company-owend grain in the
second quarter 2015 compared to 2 million in the second quarter of
prior year, and increasing inventory quantities in-store by
41%;
- Made progress towards finalizing a long-term agreement with a
global fertilizer company to develop fertilizer distribution at
Northgate. This development would allow Ceres to bring 65-80 car
trains of phosphate-based fertilizer to Northgate, warehouse it,
and load trucks out in Nothgate's new high-speed terminal;
- Completed Phase 1 of the elevator at Northgate, Ceres' new
commodities logistics centre as scheduled. The commissioning of the
elevator is underway and should be completed in November as
planned. During the quarter ended September
30, 2015, Ceres handled 0.8 million bushels of grain for the
quarter ended September 30, 2015
compared to 0.6 million bushels for the quarter ended June 30, 2015. There was no comparative period
for the prior year;
- Recognized a gain of $1.4 million
on its investment in Canterra Seeds due to an increase in the
investee's share value resulting from additional shares being
issued in September 2015;
"The progress we've made this year at our high-speed inland
grain terminal at Northgate supports our goal to become a preferred
supplier of commodities to end-users throughout North America and Europe," said Ceres Chief Executive Officer
Patrick Bracken. "We expect to see
continued advancement at Northgate, along with greater utilization
of the terminal assets in our network, throughout the year."
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 profits for the quarter ended September 30, 2015 and 2014 totaled $1.5 million compared with $5.3 million, respectively, representing a
reduction of $3.8 million in gross
profit. The reduction in the current year quarter compared to prior
year, was driven by a reduced net trading margin resulting from
minimal margin opportunity in the current market environment.
For the six-months ended September 30,
2015, gross profit totaled $3.4
million compared with $6.5
million for the six-months ended September 30, 2014. The decline in gross profits
of $3.1 million was driven by a
reduction in net trading margins of $1.9
million, and an increase in operating expenses of
$1.7 million, which was entirely due
to the operations and expenses incurred as part of operating our
Northgate facility, which totaled $1.5
million.
For the quarter ended September 30,
2015, general and administrative expenses totaled
$2.5 million, which represents a
decrease of $0.4 million from the
same quarter a year ago. The reduction is largely due to a
reduction in corporate administrative expenses, which declined
nearly $0.7 million due to the
Northgate Commodity Logistics Centre (NCLC) expenses incurred
during the same quarter ended 2014, which were not incurred during
the quarter ended September 30, 2015.
This decline was slightly offset by $0.3
million by an increase in personnel costs.
For the six-months ended September 30,
2015, general and administrative expenses totaled
$5.0 million compared with
$6.3 million for the six-months ended
September 30, 2014. The reduction of
$1.3 million is due to a reduction in
corporate administrative expenses related to consulting,
engineering and outside services, which were incurred last year
associated with the build-out of NCLC. A decline in such expenses
were partially offset by an increase of approximately $0.3 million in the Grain Division general and
administrative primarily driven by personnel costs. This is due to
increased personnel as the Corporation has expanded and continues
to expand its grain trading and energy logistics business.
Consolidated EBITDA for the quarter ended September 30, 2015 was $1.3 million compared to $3.2 million for the same quarter a year ago.
Consolidated EBITDA for the six months ended September 30, 2015 was $1.3 million compared to $1.4 million for the same period a year ago.
Net income was $100,000 for the
quarter ended September 30, 2015
compared to $1.9 million for the
prior year. Net loss for the for the six months ended September 30, 2015 was $1.6 million compared to ($0.2 million) for the same period a year ago.
The Corporation's sources of liquidity as at September 30, 2015 are cash and cash equivalents
and available funds under its revolving credit facility. Available
cash and unused credit facilities for the quarter ended
September 30, 2015 was $127.2 million versus $100.5 million for the quarter ended March 31, 2015.
Management believes that cash flow from operations will be
adequate to fund operating expenditures, maintenance capital,
interest, and any income tax obligations. Growth capital
expenditures in the next 12 months will be funded by cash on hand
and borrowing against the credit facility. Any additional debt
incurred will be serviced by the anticipated increases in cash flow
and will only be borrowed within the Corporation's debt covenant
limits.
Outlook
Grain Division
During the quarter ended September 30,
2015, the Corporation has amended its existing third-party
storage and rental agreements while entering into a new such
agreements that meet the Corporation's internal hurdles and
optimize space and utilization for company-owned inventories. Due
to attractive carries in its core commodities, the Corporation has
increased its inventory levels since March
31 and June 30, 2015 by 27%
and 41%, respectively.
While this has provided consistent income for some products and
favorably positions the Corporation going forward, the last six
months have been challenging. Due to flat markets we have not been
able to generate consistent trading margins we anticipate to earn
over the following two fiscal quarters.
The Corporation continues to execute on its strategy as being a
preferred supplier to end-users throughout North America and Europe. The high-speed
inland grain terminal at Northgate is key to this effort and
significant progress has been made to reach key gateways into
the United States, Latin America and Asia, with Phase 1 having been completed in
October. With advancement at Northgate, along with greater
utilization of the terminal assets in our network, consistent
momentum is expected to yield desirable results as our year
progresses.
Logistics Division
Concurrent with our grain operations at Northgate, as disclosed
in our MD&A for the quarter ended June
30, 2015, and in conjunction with our partnership with Elbow
River Marketing Ltd. ("ERM"), a wholly owned subsidiary of Parkland
Fuel Corporation, we continue to unload liquefied petroleum gas
("LPG") from inbound trucks loading LPG into railcars for shipment
into the U.S. market via the BNSF from Northgate, Saskatchewan. This provides a direct link and
an added access point for LPG to enter the U.S. market. We
anticipate that this business will continue to grow throughout the
second half of this year and into the following fiscal year. We are
continuing to renegotiate and extend our current transloading
agreement with ERM while exploring opportunities to build out and
further develop the NCLC LPG transloading business with additional
tenant customers. In addition, the Corporation is pursuing
opportunities that further leverage the international port
advantages of NCLC with other oilfield and agricultural inputs
products.
In addition, the Corporation is in the process of finalizing a
long-term agreement with a global fertilizer company to develop
fertilizer distribution at Northgate. This development would allow
Ceres to bring 65-80 car trains of phosphate-based fertilizer to
Northgate, warehouse it, and load trucks out in a new, state of the
art high-speed terminal. This arrangement would provide the
Corporation's grain suppliers at Northgate with the ability to
backhaul grain, as local grain suppliers would reload their trucks
with fertilizer after having unloaded grain and return to their
origination. This would greatly improve transportation economics,
and further highlight Northgate as an advantageous pricing
gateway.
Conference Call Details
Ceres will hold a conference call to discuss second quarter
fiscal 2016 results on Friday, November 6,
2015 at 10:00 a.m. ET.
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:
68055145. Please dial in 15 minutes prior to the call to
secure a line.
The conference call will be archived for replay until
Friday, November 20, 2015 at
midnight, ET. To access the archived conference call, please dial
1-855-859-2056 and enter the encore code 68055145.
A live audio webcast of the conference call will be available
at:
http://event.on24.com/r.htm?e=1082801&s=1&k=118E213FF59C2CF4647F505D12AE6BC7
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 90 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.
SOURCE Ceres Global Ag Corp.