MINNEAPOLIS, MN, Nov. 12, 2020 /CNW/ - Ceres Global Ag Corp. (TSX:
CRP) ("Ceres" or the "Corporation") today announced its financial
and operating results for the quarter ended September 30, 2020. All amounts are in U.S.
currency unless otherwise noted.
CEO Commentary
"While volumes and sales revenue increased from the same quarter
one year ago, profitability was lower due to a reduction in trade
margins," said Robert Day, President
and Chief Executive Officer of Ceres. "Stronger-than-expected
Chinese demand for U.S. soybeans and corn has driven U.S. rail
freight higher, which negatively impacted our ability to export
core products through U.S. ports. Meanwhile, our results for the
quarter were supported by the diversification, expansion and
strengthening of our business over the past several years.
Specifically, first quarter results benefitted from the
acquisitions of Nature's Organic Grist, Delmar Commodities and the
Nicklen Siding elevator in Northern
Saskatchewan that was completed part way through the
quarter."
Summary Financial and Operational Results
(in thousands of
USD except per share)
|
3-Months Ended
September 30, 2020
|
3-Months
Ended
September 30,
2019
|
Revenue
|
$172,097
|
$127,072
|
Gross
profit
|
$3,810
|
$6,686
|
Income from
operations
|
$42
|
$3,301
|
Net income
(loss)
|
$(936)
|
$1,758
|
Earnings (loss) per
basic share
|
$(0.03)
|
$0.06
|
EBITDA1
|
$1,618
|
$4,639
|
Financial and Operational Highlights for the quarter ended
September 30, 2020
- Revenues increased $45.0 million
compared to the first quarter of the prior year, due to a 28%
increase in grain bushels handled over the prior year and an
increase in commodity prices.
- Gross profit decreased by $2.9
million compared to the first quarter of the prior year, in
part due to lower margins per bushel as compared to the year
prior. In addition, high U.S. rail freight costs, due to
strong Chinese demand for soybeans, limited opportunities to make
new sales of durum and wheat for export.
- Ceres expects to close on the formation of a joint venture with
a farmer cooperative in northern Minnesota early in the upcoming calendar year,
which would allow Ceres to increase its grower origination in
the region.
- In September 2020, Ceres acquired
a grain elevator and related assets in Ridgedale, Saskatchewan and has successfully
integrated the operations into its broader network.
- Long-term agreements were finalized with Sevita International
Corporation for the production and distribution of soybeans and
with Horizon Seeds Canada Inc. for the distribution of corn seed in
Western Canada.
Outlook
Mr. Day continued, "While the first quarter was challenging, and
exporting through U.S. ports will continue to be difficult through
the 2020 calendar year, we are encouraged by the increase in market
volatility and trading activity in the U.S. market today. In
addition, we are optimistic about our ability to export through
U.S. ports in the spring and the prospect for positive results
overall for the second half of fiscal 2021. We also remain focused
on growth. We expect to make an announcement in the coming
weeks regarding the establishment of a joint venture in northern
Minnesota to expand our grower
origination network and we continue to work on the expansion of our
soybean crush plant in Jordan,
Manitoba, which we expect to
complete by next summer. Meanwhile, we have a strong pipeline of
greenfield and acquisition opportunities that we are evaluating and
pursuing."
Conference Call Details
Ceres will hold a conference call to discuss its first quarter
fiscal year 2021 financial and operational results on Thursday, November 12, 2020 at 9:00 a.m. EST. Robert
Day, Ceres' President and CEO, and Jay Bierley, 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. Please dial in 15 minutes prior to
the call to secure a line. The conference call will be archived for
replay until Thursday, November 26,
2020 at midnight, ET. To access the archived conference
call, please dial 1-855-859-2056 and enter the reservation number
4957836.
A live audio webcast of the conference call will be available
at: http://bit.ly/CeresQ12021. 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.
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)
Through its network of commodity logistics centers and team of
industry experts, Ceres Global merchandizes high-quality North
American agricultural commodities and value-added products and
provides reliable supply chain logistics services to agricultural,
energy and industrial customers worldwide.
Ceres Global 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 31 million
bushels.
Ceres Global has a 50% interest in Savage Riverport, LLC, a
joint venture with Consolidated Grain and Barge Co., a 50% interest
in Gateway Energy Terminal, a joint operation 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.
For more information about Ceres Global, please visit
www.ceresglobalagcorp.com
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 September 30, 2020. 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.