MINNEAPOLIS, MN, May 9, 2018 /CNW/ - Ceres Global Ag Corp. (TSX:
CRP) ("Ceres" or the "Corporation") today announced its financial
and operating results for the three and nine months ended
March 31, 2018. All amounts are in
U.S. currency unless otherwise noted.
CEO Commentary
"As expected for the winter season,
third quarter volumes and revenues were low due to Great Lakes and
river closures," said Robert Day,
President and Chief Executive Officer of Ceres. "Adjusted net
income was also impacted by deferred hedges on inventory that will
be earned back over time, and a one-time write off due to a
customer's inability to pay. Combined, these two items represent
more than half the gap between revenues and costs for the quarter,
and absent those items, our gross margin per unit handled was much
better when compared to the same quarter one year ago."
"As we enter the fourth quarter, we are excited about efforts
being made to establish a better balance between stable revenues
and costs. The formation of Savage Riverport, LLC is a key
step in that direction as it lowers costs and generates
$8.5 million in cash proceeds that we
can use to acquire and build assets, to increase our presence in
origination of product direct from growers," Mr. Day continued.
"The joint venture will increase the value of our existing network
of terminal facilities and lower our cost to supply customers."
Summary Financial and Operational Results
(in thousands of
USD except per
share and bushels handled)
|
3-Months Ended
March 31, 2018
|
3-Months Ended
March 31, 2017
|
9-Months Ended
March 31, 2018
|
9-Months Ended
March 31, 2017
|
Revenue
|
$98,106
|
$128,534
|
$318,314
|
$416,300
|
Gross
profit
|
$2,399
|
$3,048
|
$9,745
|
$7,789
|
Income from
operations
|
$(933)
|
$631
|
$751
|
$805
|
Net income
(loss)
|
$(1,802)
|
$(8,104)
|
$(2,382)
|
$(9,613)
|
Earnings (loss) per
basic share
|
$(0.06)
|
$(0.29)
|
$(0.09)
|
$(0.35)
|
EBITDA1
|
$302
|
$1,568
|
$4,162
|
$4,315
|
Adjusted net
income2
|
$(1,029)
|
$(363)
|
$(159)
|
$(1,377)
|
Total bushels handled
and merchandized
|
16.3
million
|
21.9
million
|
60.5
million
|
81.4
million
|
Financial and Operational Highlights for Q3 FY2018
- Generated revenue of $98.1
million, a 24% decrease from the third quarter fiscal year
2017.
- Gross profit decreased by 21% to $2.4
million compared to the third quarter fiscal year 2017 due
to the decrease in net trading margin offset by increases in
storage and rental income, and logistics and transloading
revenue.
- Increased storage and rental income by 37% and increased
logistics and transloading revenue by 224% compared to the third
quarter of fiscal year 2017.
- Total number of bushels handled and merchandised decreased by
26% as a result of challenging margins in the broader market.
- The previously disclosed trial by jury of the Scoular
litigation is scheduled to commence on October 9, 2018.
Outlook
Mr. Day continued, "While third quarter volumes and revenues were
seasonally down, we are encouraged by steady progress across our
core product lines, and we are seeing better merchandizing
opportunities in the fourth quarter and into the coming fiscal
year. Over the next several quarters we will continue to make
changes to our physical infrastructure that will allow us to more
competitively originate products and consistently create value for
our end-use customers."
"In addition, the economics around handling crude oil at
Northgate continue to improve and we are pushing hard to develop a
long-term business around that opportunity," Mr. Day added.
"Meanwhile, our baseline transload business at Northgate is
experiencing steady growth as fertilizer volume has been stable,
propane volume has increased and we are adding a variety of new
products to the mix."
Conference Call Details
Ceres will hold a conference
call to discuss its Q3 FY2018 financial and operational results on
Thursday, May 10, 2018 at
9:00 am ET. Robert Day, Ceres' President and CEO, and
Kyle Egbert, 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: 3277915. Please dial
in 15 minutes prior to the call to secure a line. The conference
call will be archived for replay until Thursday, May 24, 2018 at midnight ET. To access the archived conference
call, please dial 1-855-859-2056 and enter the encore code
3277915.
A live audio webcast of the conference call will be available
at:
https://event.on24.com/wcc/r/1658247/9AF920184A0A8FEE20C1660B466181FC.
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,
it is a metric that is used by management to determine the
Corporation's ability to service its debt and finance capital.
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.
2Adjusted net income is not a standardized financial
measure prescribed by IFRS; however, it is a metric that is used by
management to determine the Corporation's profitability excluding
non-reoccurring events.
In calculating adjusted net income, Ceres excludes gain (loss)
on sale or impairment of property, plant and equipment, income
(loss) from investments in associates, revaluation of warrants and
legal expense related to ongoing litigation and one-time
write-downs. Ceres may calculate adjusted net income differently
than other companies; therefore, Ceres' Adjusted Net Income may not
be comparable to similar measures presented by other
issuers.
Investors are cautioned that EBITDA and adjusted net income
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)
Through our network of commodity logistics centers and team of
industry experts, Ceres procures and provides North American
agricultural commodities & value-added products, industrial
products, fertilizer, energy products and reliable supply chain
logistics services to customers worldwide.
Ceres operates five locations, Duluth,
MN; Minneapolis, MN;
Shakopee, MN; Northgate,
Saskatchewan; and Port Colborne, Ontario, and is headquartered
in Minneapolis, MN. Our facilities
throughout North America have an
aggregate grain and oilseed storage capacity of approximately 29.7
million bushels.
Ceres also has a 50% interest in Savage Riverport LLC, a joint
venture with Consolidated Grain and Barge Co. ("CGB"), a 25%
interest in Stewart Southern Railway Inc., a short-line railway
located in southeast Saskatchewan
with a range of 130 kilometers, and a 17% interest in Canterra Seed
Holdings Ltd, a Canadian-based seed development company.
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 further
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 MD&A for the
period ended March 31, 2018. 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.