Market Overview

Ceres Global Ag Reports Financial Results For Q1 FY2018

Share:

MINNEAPOLIS, MN, Nov. 14, 2017 /CNW/ - Ceres Global Ag Corp. (TSX: CRP) ("Ceres" or the "Corporation") today announced its financial and operational results for the three-month period ended September 30, 2017. All amounts are in U.S. currency unless otherwise noted.

CEO Commentary

"Despite a delayed harvest and an increasingly challenging environment for our industry overall, we managed to improve gross margins by $1.2 million vs. the same quarter a year ago," said Robert Day, President and Chief Executive Officer of Ceres. "Volumes for the quarter were less than initially anticipated, however, margins were better year on year, which was made possible by the learning and skill-building that was obtained from the significant increase in volume last fiscal year."

"Our goal is to be recognized by our customers as providing superior service and to be compensated fairly for doing so," Mr. Day continued. "Through consistent purchase and supply of raw materials, value-added products and supply chain services we are moving closer to that goal."

Summary Financial and Operational Results

(in thousands of USD except per
share and bushels handled)

Three months ended
September 30, 2017

Three months ended
September 30, 2016

Revenue

$130,638

$155,927

Gross profit (loss)

$3,063

$1,871

EBITDA1

$1,523

$744

Income (loss) from operations

$519

$(605)

Net income (loss)

$(806)

$(1,356)

Earnings (loss) per share - Basic

$(0.03)

$(0.05)

Total bushels handled and
merchandized

27.2 million

35.0 million

 

Financial and Operating Highlights for Q1 FY2018

  • Generated revenue of $130.6 million, a 16% decrease from Q1 FY2017.
  • Increased gross profit 64% to $3.1 million from Q1 FY2017 due to increased storage and rental income.
  • Handled 50% more third-party bushels of grain and oilseed compared to Q1 FY2017.
  • Total number of bushels handled and merchandised decreased by 22% as a result of a late harvest season.
  • Increased income (loss) from operations $1.1 million compared to Q1 FY2017.
  • Generated $13.6 million cash flow from operations, a 172% increase from Q1 FY2017.
  • The previously disclosed trial by jury of the Scoular litigation was delayed and is now expected to start in Q3 FY2018.

Outlook

Mr. Day continued, "The summer droughts across the U.S. upper Midwest and prairies in Canada generated widely varied crop qualities and yields.  As a result, trade flows are slightly different from what was expected and we are adapting to those changes.  Specifically, we are handling less volume vs. a year ago, but we're focusing on trade flows where margins are most attractive, which we expect will lead to a better result overall."

"At Northgate, early stage volumes in our partnership with Koch Fertilizer Canada have exceeded expectations," Mr. Day added. "Our state of the art infrastructure is providing Koch's customers with the most efficient turnaround times in the industry, and in many cases those same trucks are first hauling grain before picking up fertilizer. Meanwhile, liquid natural gas volumes have been better than expected as the market has been spurred on by U.S. demand."

Conference Call Details
Ceres will hold a conference call to discuss its Q1 FY2018 financial and operational results on Wednesday, November 15, 2017 at 1:00 pm 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: 6699717. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Wednesday, November 29, 2017 at midnight ET. To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 6699717.

Non-IFRS Financial Measures

1EBITDA (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-reoccurring 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 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)
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 six (6) grain storage and handling assets in Minnesota, Saskatchewan and Ontario having aggregate storage capacity of approximately 34.4 million bushels.

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 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 September 30, 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.

View original content: http://www.newswire.ca/en/releases/archive/November2017/14/c1463.html

View Comments and Join the Discussion!