MINNEAPOLIS, MN, Sept. 17, 2019 /CNW/ - Ceres Global Ag Corp.
(TSX: CRP) ("Ceres" or the "Corporation") today announced its
financial and operating results for the quarter and year ended
June 30, 2019. All amounts are in
U.S. currency unless otherwise noted.
CEO Commentary
"Income from operations improved in the
fourth quarter and on an annual basis while overall net income was
negatively impacted by three large non-recurring events over the
year," said Robert Day, President
and Chief Executive Officer of Ceres. "The core grain business, the
Nature's Organic Grist business and our energy and industrial
products supply chain services operations performed very well,
despite challenges stemming from pre-harvest volatility. In
addition, the acquisition of Delmar Commodities Ltd. in
August 2019 marks a very significant
step in our overall growth plan."
"While income from operations continues to improve on a
quarterly and annual basis, the Corporation is most excited about
the progress made around growth-based initiatives and the impact we
expect they will have going forward. The formation of the Gateway
Energy Terminal joint venture with Steel Reef Infrastructure Corp.,
the acquisition of Delmar, and the Company's addition of talent at
the executive level have positioned Ceres for a positive start to
fiscal year 2020. We are confident we can maintain the positive
trajectory of improved financial results while also continuing to
make significant progress towards achieving our strategic growth
objectives."
Summary Financial and Operational Results
(in thousands of
USD except per share)
|
3-Months Ended
June 30, 2019
|
3-Months Ended
June 30, 2018
|
12-Months
Ended
June 30, 2019
|
12-Months
Ended
June 30, 2018
|
Revenue
|
$134,741
|
$92,089
|
$438,396
|
$411,122
|
Gross
profit
|
$2,967
|
$1,925
|
$14,320
|
$11,670
|
Income from
operations
|
$(141)
|
$(971)
|
$1,289
|
$(223)
|
Net income
(loss)
|
$(1,858)
|
$1,829
|
$(16,871)
|
$(556)
|
Earnings (loss) per
basic share
|
$(0.07)
|
$0.07
|
$(0.60)
|
$(0.02)
|
Earnings (loss) per
diluted share
|
$(0.06)
|
$0.07
|
$(0.58)
|
$(0.02)
|
EBITDA1
|
$1,370
|
$209
|
$(4,061)
|
$4,369
|
Adjusted net
income2
|
$(1,811)
|
$(1,277)
|
$(5,716)
|
$(1,438)
|
Financial and Operational Highlights for the quarter and year
ended June 30, 2019
- Income from operations increased $1.5
million compared to the previous year.
- Gross margins from the Grain Division increased by $5.0 million, due to the presence of Nature's
Organic Grist ("NOG") as well as increased gross margins
from core product lines.
- Grain storage and handling revenue decreased by nearly
$4 million, due to a decrease in
barley volumes and the sale of the Savage elevator to Savage
Riverport, LLC.
- Non-grain storage and handling revenue increased by over
$1 million, due to increased volumes
from Natural Gas Liquids ("NGL"), fertilizer and industrial
products.
- Overall operating and SG&A costs decreased by nearly
$1.0 million, due mainly to the sale
of the Savage elevator to Savage Riverport, LLC.
- Interest costs increased by $1.4
million, due to higher average inventory in FY 2019 vs. FY
2018 as well as increased outstanding term debt year over
year.
- The Corporation increased its term debt from $20 million to $35
million to fund business opportunities, and increased its
revolving credit facility from $67.5
million to $80 million to
support anticipated increases in volumes.
- Significant progress was made on growth-based initiatives
during FY 2019: acquisition of NOG, formation of the joint venture
with Steel Reef, and due diligence activities that resulted in the
acquisition of Delmar Commodities Ltd. ("Delmar") on
August 16, 2019.
- Income from operations for the quarter ended June 30, 2019 increased $0.8 million compared to the same quarter in the
previous year. The increase was due to increases in gross margins
from the presence of NOG, core grain product lines and non-grain
storage & handling, and a decrease in grain storage and
handling revenue; meanwhile, lower operating and SG&A costs
were offset by higher interest costs from carrying more
inventories.
- Three non-recurring events driving the net loss of $16.9 million were the $8.2 million expense taken in fiscal year 2019
related to the settlement of the Scoular lawsuit, $4.0 million amortization of intangible assets,
and write down of portfolio investments of $1.9 million.
Outlook
Mr. Day continued, "While the environment continues to be
challenging for our industry, Ceres' growth plan continues to gain
traction and we expect financial results to continue along their
current positive trend. Meanwhile, we continue to review
potential growth opportunities and we plan to add more
complementary businesses and assets to our network in fiscal year
2020."
"The formation of Gateway Energy Terminal and the acquisition of
Delmar provide very different and exciting opportunities for the
Corporation to increase top-line revenue during fiscal year 2020
and beyond."
Conference Call Details
Ceres will hold a conference
call to discuss its fourth quarter and annual 2019 financial and
operational results on Wednesday, September
18, 2019 at 10:00 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: 3644719. Please dial
in 15 minutes prior to the call to secure a line. The conference
call will be archived for replay until Wednesday, October 2, 2019 at midnight ET. To access the archived conference
call, please dial 1-855-859-2056 and enter the encore code
3644719.
A live audio webcast of the conference call will be available
at:
https://event.on24.com/wcc/r/2064815/6DB48E479A75E277DF1CFA228923F2F9.
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
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,
gain (loss) on equity investments, 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 its network of commodity
logistics centers and team of industry experts, Ceres procures and
supplies North American agricultural commodities and value-added
products, and provides reliable supply chain logistics services for
industrial products, fertilizer, and energy products customers
worldwide.
Ceres is headquartered in Minneapolis,
Minnesota and together with its affiliated companies,
operates 13 locations across Saskatchewan, Manitoba, Ontario, and Minnesota. These facilities have an aggregate
grain and oilseed storage capacity of approximately 30.8 million
bushels.
Ceres also has a 50% interest in Savage Riverport, LLC, a joint
venture with Consolidated Grain and Barge Co., a 50% interest in
interest in Gateway Energy Terminal, a joint venture with Steel
Reef Infrastructure Corp., 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
Canada-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 June 30, 2019. 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.