-
Generates Gross Profit of $2.9
million and EBITDA of $2.0
million
MINNEAPOLIS, MN, Feb. 14, 2017 /CNW/ - Ceres Global Ag Corp.
(TSX: CRP) ("Ceres" or the "Corporation") today announced its
second quarter financial and operational results for the three- and
six-month periods ended December 31,
2016. All amounts are in U.S. currency unless otherwise
noted.
"We are encouraged by progress made during the second quarter as
we continue to more effectively utilize our assets, increase our
product breadth and better reach chosen customers, both in the U.S.
and internationally," said Robert
Day, President and CEO of Ceres. "We set a goal to
double the number of bushels handled this year, and we are on pace
to achieve our target. In addition, gross profit continues to
improve from the increase in volumes and from the broadening of our
product mix. We believe that high volumes and diversification
of product mix are critical for profitable growth in 2017 and
beyond as margins remain challenging in many segments of the
industry."
Summary Financial and Operational Results
(in millions of
USD except per share)
|
Three
months
ended
December 31,
2016
|
Three months
ended
December 31,
2015
|
Six
months
ended
December 31,
2016
|
Six
months
ended
December 31,
2015
|
Revenue
|
$131.8
|
$61.4
|
$287.8
|
$134.4
|
Gross profit
(loss)
|
$2.9
|
$(7.8)
|
$4.7
|
$(6.7)
|
EBITDA1
|
$2.0
|
$(8.9)
|
$2.7
|
$(8.0)
|
Income (loss) from
operations
|
$0.8
|
$(9.8)
|
$0.2
|
$(10.7)
|
Net income
(loss)
|
$(0.2)
|
$(10.1)
|
$(1.5)
|
$(10.0)
|
Earnings (loss) per
basic share
|
$(0.01)
|
$(0.37)
|
$(0.06)
|
$(0.37)
|
Total bushels
handled
|
24.6
|
15.0
|
59.5
|
29.4
|
Financial and Operational Highlights for Q2 FY2017
- Generated revenue of $131.8
million, up 147% from $61.3
million for the comparative quarter in FY2016.
- Gross profit was $2.9 million, up
from a gross profit loss of $7.8
million incurred in the comparative quarter in FY2016. Gross
profit improved as a result of a number of measures implemented by
management to improve operational efficiencies and limit exposure
to commodity price volatility.
- Net loss was $153,000. This
compares to a net loss of $10.1
million incurred in the comparative period of last year due
to a durum wheat loss of $ 8.9 USD
million (C$11.7 million).
- Handled 24.6 million bushels of company-owned and third-party
grain and oilseeds during the quarter, up 61% from 15.0 bushels in
the comparative quarter of 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 under budget, and is expected to be fully
operational by May, 2017.
- 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.
- Issued 1,250,000 common shares on the exercise of warrants by
VN Capital for proceeds of C$7.3
million (USD$5.4 million) in
connection with the Corporation's rights offering that closed at
the end of 2014. The proceeds were used for repayment of the
Corporation's outstanding term debt.
Outlook
"While margins remain below normal levels across much of the
industry, we are confident in our ability to demonstrate steady
progress in our financial and operational performance for the
balance of 2017 and beyond," said Mr. Day. "Specifically, over the
coming months and quarters we expect to:
- Increase origination volume directly from farmers;
- Lower fixed cost per unit handled by continuing to increase
volumes throughout our network;
- Extend our reach to new regions in the U.S. and abroad;
- Continue hiring talented people; and
- Make investments in our infrastructure to broaden our product
mix and strengthen our supply chain from end to end."
Mr. Day added, "And with Q1 and Q2's operational performance, we
are well on our way to reach our target of more than 100 million
total bushels handled for the year.
"In addition to encouraging trends for grain and oilseed
merchandizing activities, we are making progress with our logistics
business at Northgate. We are on track to complete the
buildout of and begin operating our 26,000 ton fertilizer storage
facility by May 2017, in time for the
planting season. While we will continue to transload propane
from Canada into the U.S., we are
also exploring several opportunities to increase the number of
industrial and oil field products that can be transloaded from the
U.S. into Canada and vice versa.
In order to realize the full value of the vast infrastructure at
Northgate, we look to continue adding new business lines and
revenue streams."
Conference Call Details
Ceres will hold a conference
call to discuss its Q2 FY2017 financial and operational results on
Wednesday, February 15, 2017 at
10:00 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:
55252740. Please dial in 15 minutes prior to the call to
secure a line. The conference call will be archived for replay
until Wednesday, March 1, 2017 at
midnight, ET. To access the archived conference call, please dial
1-855-859-2056 and enter the encore code 55252740.
A live audio webcast of the conference call will be available
at:
http://event.on24.com/r.htm?e=1350413&s=1&k=4842C2DD00E13811FC1225714C3786FD
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-recurring 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
an alternative to net income or loss, or to other standardized
financial measures determined in accordance with IFRS, and is 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 December 31, 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 quarter ended December 31,
2016. 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.