Volumes up 72% and EBITDA of $1.6 million
MINNEAPOLIS, MN, May 11, 2017 /CNW/ - Ceres Global Ag Corp.
(TSX: CRP) ("Ceres" or the "Corporation") today announced its
financial and operational results for the three- and nine-month
periods ended March 31, 2017. All
amounts are in U.S. currency unless otherwise noted.
CEO Commentary
"Despite seasonal weather limiting the
number of bushels handled through our network of facilities as a
result of freezing in the Great Lakes and Mississippi River, we
continued to improve across key financial and operational metrics
in Q3 vs. a year ago," said Robert
Day, President and CEO of Ceres "Most notably, we
achieved gross profits of $3.0
million, EBITDA of $1.6
million and we increased the total number of bushels handled
and merchandized by 72%, putting us on track to meet our target of
110 million bushels for the year. It is also worth noting
that the comparative quarter from a year ago included a one-time
commission from the prior sale of an asset of $1.5 million that was not part of the day to day
operations. Removing that, our gross profit more than doubled vs.
the same quarter a year ago."
Mr. Day added, "Consistent with our strategy to optimize our
network of facilities, we recorded an asset impairment charge of
$7.7 million for the idled
Buffalo and Duluth-Lakeport facilities, negatively impacting our
bottom-line performance. This will lower costs on a go forward
basis by approximately $1.2 million
per annum, which strengthens our competitive positioning."
Summary Financial and Operational Results
(in millions of
USD except per share
and bushels handled)
|
3-Month
Period ending
March 31, 2017
|
3-Month
Period ending
March 31, 2016
|
9-Month
Period ending
March 31, 2017
|
9-Month
Period ending
March 31, 2016
|
Revenue
|
$128.5
|
$87.3
|
$416.3
|
$221.7
|
Gross profit
(loss)
|
$3.0
|
$2.8
|
$7.8
|
$(3.9)
|
EBITDA1
|
$1.6
|
$1.9
|
$4.3
|
$(6.1)
|
Income (loss) from
operations
|
$0.6
|
$0.9
|
$0.8
|
$(9.7)
|
Net income
(loss)
|
$(8.1)
|
$0.8
|
$(9.6)
|
$(9.2)
|
Earnings (loss) per
basic share
|
$(0.29)
|
$0.03
|
$(0.35)
|
$(0.34)
|
Total bushels handled
and merchandized
|
21.9M
|
12.7M
|
81.4M
|
42.6M
|
Financial and Operational Highlights for Q3 FY2017
- Generated revenue of $128.5
million, up 47% from $87.3
million for the comparative quarter in FY2016.
- Gross profit was $3.0 million, up
7% from $2.8 million for the
comparative period of FY2016, or 131% when removing the one-time
commission of $1.5 million realized
in the comparative period of FY2016 from a prior asset sale.
- Net loss was $8.1 million. This
compares to a net income of $0.8
million for the comparative period of FY2016.
- Handled approximately 16.1 million bushels of grains and
oilseed through the Corporation's network of facilities in Q3
FY2017, up 69% from the 9.5 million bushels handled in the
comparative period of last year.
- Direct shipped 5.8 million bushels from origin to end user
during the quarter, up from 3.2 million for the comparative period
of 2016.
- As at March 31, 2017, Ceres had
working capital of $43.7 million,
including cash totaling $0.8 million.
This compares to working capital of $56.8
million and cash of $0.7
million at year end June 30,
2016.
Highlights Subsequent to Quarter End
- Completed 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 was completed on time and under budget, with the first
railcar of fertilizer delivered on April 30,
2017. In addition, the project has begun with both urea and
phosphates whereas the original plan had been to market only
phosphates.
Outlook
"After two years of developing trade flows to fully utilize the
capacity of our network and completing key capital projects at
Northgate and elsewhere, we are poised for improved financial
results and profitable growth that will satisfy shareholder
expectations," said Mr. Day. "Meanwhile, our focus on
originating product from farmers and supplying chosen customers at
a service level that is unmatched in the market continues to
underpin our strategy and focus. Specifically, we are looking
to:
- Increase origination volume directly from farmers in the U.S.
and Canada;
- Lower fixed cost per unit handled by continuing to increase
volumes throughout our network;
- Make investments in our infrastructure to broaden our product
mix and strengthen our supply chain from end to end;
- Extend our reach to new regions in the U.S. and abroad;
and
- Continue hiring talented people who can execute on our
strategy."
Conference Call Details
Ceres will hold a conference
call to discuss its Q3 FY2017 financial and operational results on
Thursday, May 11, 2017 at
5:00 pm. 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: 14372819. Please
dial in 15 minutes prior to the call to secure a line. The
conference call will be archived for replay until Thursday, May 25, 2017 at midnight, ET. To access
the archived conference call, please dial 1-855-859-2056 and enter
the encore code 14372819.
A live audio webcast of the conference call will be available
at: http://event.on24.com/r.htm?e=1416388&s=1&k=7A53E0C5646673FA19B0E7B13DEA744C.
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 March 31, 2017 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, and
a 17% interest in Canterra Seed Holdings Ltd, a provider of a full
range of seed products, including canola, wheat, barley, oats,
pulses and corn
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 March 31,
2017. 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.