TORONTO, Nov. 9, 2016 /CNW/ - Ceres Global Ag Corp. (TSX:
CRP) ("Ceres" or the "Corporation") today announced its first
quarter financial and operational results for the three-month
period ended September 30, 2016. All
amounts are in U.S. currency unless otherwise noted.
"Against a backdrop of low commodity prices and compressed
margins, we advanced on the execution of our strategy by focusing
our efforts on increasing volume throughput, diversifying our
product mix, streamlining operations and strengthening our
management capabilities, particularly in trading and
merchandizing," said Robert Day,
President and CEO of Ceres Global Ag Corp. "Our progress in
the quarter was reflected in the doubling of bushels handled to 25
million, the increase in gross profit by more than 72% to
$1.9 million and the quality of
customers served. We expect to sustain this momentum through
the balance of the year given the merchandizing opportunities
provided by this year's harvest."
Summary Financial and Operational Results
|
Q1
FY2017
|
Q1
FY2016
|
Revenue
|
$155.9
Million
|
$73.0
Million
|
Gross profit
(loss)
|
$1.9
Million
|
$1.1
Million
|
EBITDA1
|
$0.7
Million
|
$0.9
Million
|
Income (loss) from
operations
|
$(0.6
Million)
|
$(0.8
Million)
|
Net income
(loss)
|
$(1.4
Million)
|
$0.1
Million
|
Earnings (loss) per
share basic and fully diluted
|
$(0.05)
|
-
|
Total bushels
handled
|
25 million
|
11.3
million
|
Financial and Operational Highlights for Q1 FY2017
- Generated revenue of $155.9
million, up 113.6% from $73.0
million for Q1 FY2016.
- Gross profit was $1.9 million, up
72.7% from $1.1 million generated in
Q1 FY2016. Gross profit was impacted by low price volatility and
substantially lower than normal merch andizing margins.
- Net loss was $1.4 million, down
from net income of $0.1 million for
the comparative period. The loss was primarily due to higher
general and administrative expenses.
- Handled approximately 25.0 million bushels of grain and oilseed
across facilities in the network during the quarter, up 112.4% from
11.3 bushels in Q1 FY2016.
- Shipped 9.9 million bushels of assorted grains directly from
third-party points of origination to end users, up 130% from 4.3
million bushels for Q1 FY2016.
- Continued the construction of the fertilizer storage warehouse
at Northgate in conjunction with the agreement to handle and store
fertilizer on behalf of Koch Fertilizer Canada, ULC ("Koch"). The
project is on time and on budget, and is expected to be fully
operational by May, 2017.
Highlights Subsequent to Quarter End
- Robert Day was appointed CEO by
the Company's Board of Directors effective November 9. Mr. Day was named President and
Interim CEO of Ceres Global Ag Corp. following Patrick Bracken's decision to retire from
day-to-day operations on May 24,
2016.
Change in reporting periods
As previously announced,
Ceres has changed its fiscal year reporting period from
April 1 to March 31 to July 1 to June 30, effective with the start of FY
2017. The change is designed to make Ceres' reporting of its
financial results consistent with industry norms and the
traditional crop season. Additionally, effective with the
start of FY2017 on July 1, 2016,
Ceres is now reporting its results in U.S. dollars.
Outlook
"Consistent with the strategy we outlined at the end of FY2016, our
efforts within our Grain division going forward will be to increase
volume throughput at facilities across our network, lower operating
costs, and extend our reach across both ends of the supply chain."
said Mr. Day. "We will continue to buy more product direct from
farmers and increase sales to chosen customers looking for high
quality and reliable logistics. This will provide us with
greater opportunities to increase margins as we participate in more
attractive areas of the supply chain and add greater value to our
customers."
Mr. Day added, "Within our logistics division, we expect to
complete the buildout and begin operating our 26,000 ton fertilizer
storage facility in May 2017, which
will improve the economics of Northgate by making it easier for
farmers to backhaul fertilizer to points of origination. The
addition of a new commodity at Northgate will add to the success we
are experiencing from the transloading of propane."
Conference Call Details
Ceres will hold a conference
call to discuss its Q1 FY2017 financial and operational results on
Thursday, November 10, 2016 at
8:00 a.m. ET. Robert Day, Ceres' President and CEO, and
Mark Kucala, Ceres' 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:
95931610. Please dial in 15 minutes prior to the call to
secure a line. The conference call will be archived for replay
until Thursday, November 24, 2016 at
midnight, ET. To access the archived conference call, please dial
1-855-859-2056 and enter the encore code 95931610.
A live audio webcast of the conference call will be available
at:
http://event.on24.com/r.htm?e=1285138&s=1&k=B125E9E8B2CC4D983DA69304165DF15F
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.
1Non-IFRS Financial Measures
EBITDA
(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)
Headquartered in Minneapolis,
Ceres Global Ag Corp. is focused on two primary businesses: a Grain
Storage, Handling and Merchandising unit; and a Commodity Logistics
unit.
Ceres operates in two business units, one of which is a grain
storage, handling, and merchandising unit anchored by a collection
of nine (9) grain storage and handling assets in Minnesota, New
York, Saskatchewan and
Ontario having aggregate storage
capacity of approximately 43 million bushels as at June 30, 2016, including 5.4 million bushels of
idle capacity.
Ceres' Commodity Logistics unit is focused on the development of
a Commodity Logistics Centre in Northgate, SK. The Northgate
Commodities Logistics Centre is a state-of-the-art grain,
agriculture services and oilfield supplies transloading site.
Ceres also has a 25% interest in Stewart Southern Railway Inc.,
a short-line railway with a range of 130 kilometres that operates
in South-eastern Saskatchewan.
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
Corporation, 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.