MINNEAPOLIS, MN, Feb. 12, 2019 /CNW/ - Ceres Global Ag Corp. (TSX:
CRP) ("Ceres" or the "Corporation") today announced its financial
and operating results for the quarter ended December 31, 2018. All amounts are in U.S.
currency unless otherwise noted.
CEO Commentary
"The second quarter was important for
Ceres as we were able to put the long-standing Scoular lawsuit
behind us and accelerate efforts around growth-based initiatives
that had been on hold pending resolution of the lawsuit," said
Robert Day, President and Chief
Executive Officer of Ceres. "We made significant progress around
growth, both in the core grain business and the supply chain
services business, and we are pushing to execute on several
exciting opportunities."
"While the overall financial result was negative for the
quarter, the net loss was primarily related to non-cash and
one-time events," Mr. Day continued. "Gross margins were lower than
previously estimated due to a low risk approach to trading during
the quarter. However, the fundamentals of our markets have not
changed and we are optimistic about our ability to maintain the
trajectory of year-over-year financial performance that we have
experienced over the past several years."
Summary Financial and Operational Results
(in thousands of
USD except per share)
|
3 Months Ended
December 31, 2018
|
3 Months Ended
December 31, 2017
|
Revenue
|
$122,820
|
$89,569
|
Gross
profit
|
$3,046
|
$4,283
|
Income from
operations
|
$(364)
|
$1,162
|
Net income
(loss)
|
$(5,159)
|
$224
|
Earnings (loss) per
basic share
|
$(0.18)
|
$0.01
|
Earnings (loss) per
diluted share
|
$(0.18)
|
$0.01
|
EBITDA1
|
$(1,225)
|
$2,333
|
Adjusted net
income2
|
$(3,076)
|
$764
|
Financial and Operational Highlights for the quarter ended
December 31, 2018
- On November 15, 2018, the
Corporation refinanced its term debt, providing increased
flexibility and funding for corporate operations, settlement of the
Scoular lawsuit, and contributed to the $38
million in working capital, much of which can be deployed
towards acquisitions and other growth opportunities.
- Natures Organic Grist, LLC ("NOG"), which was acquired on
July 11, 2018, has been integrated
into Ceres and generated positive gross profits for the
Corporation.
- Significant progress was made on growth-based initiatives,
moving the Corporation closer to increasing its origination
infrastructure and market reach.
- Gross margins were slightly lower than expected, due to a low
risk approach towards trading and currency translation.
- Costs increased over the quarter, due to incremental
growth-based initiatives around supply chain services for new
products at Northgate, which will lead to higher gross margins in
the coming quarters.
- Two significant non-cash related events (amortization of
intangible assets and a write-down in the value of the
Corporation's investment in Canterra Seeds Holdings Ltd.)
contributed to the net loss for the quarter.
Outlook
Mr. Day continued, "We expect our core grain business will continue
to perform well through the 2019 fiscal year, and investments made
around supply chain services at Northgate will begin to generate
positive gross margins."
"We are growing our business by adding complementary farmer
grain origination assets to our network that allows us to more
competitively originate products directly from farmers and to build
more optionality across our supply chains," Mr. Day added. "In
addition, we are closer to a long-term opportunity in the
hydrocarbon space at Northgate and look forward to sharing more
about that in the coming quarters."
Conference Call Details
Ceres will hold a conference
call to discuss its second quarter fiscal year 2019 financial and
operational results on Wednesday, February
13, 2019 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: 6077242. Please dial
in 15 minutes prior to the call to secure a line. The conference
call will be archived for replay until Wednesday, February 20, 2019 at midnight ET. To access the archived conference
call, please dial 1-855-859-2056 and enter the encore code
6077242.
A live audio webcast of the conference call will be available
at:
https://event.on24.com/wcc/r/1921953/03F766E491A2DA0931279AED616B17F5
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 gains and losses on
property, plant and equipment, assets held for sale, and gains and
losses on equity investments as these items are considered to be
non-reoccurring in nature. 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
unusual 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 six locations, Duluth,
MN; Minneapolis, MN;
Shakopee, MN; Northgate,
Saskatchewan; and Port Colborne, Ontario; Savage, MN (Savage Riverport, LLC) 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 December 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
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.