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Ag Growth Announces Second Quarter 2018 Results; Declares Dividends

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Ag Growth Announces Second Quarter 2018 Results; Declares Dividends

Canada NewsWire

WINNIPEG, Aug. 9, 2018 /CNW/ - Ag Growth International Inc. (TSX:AFN) ("AGI", the "Company", "we" or "our") today announced its financial results for the three and six months ended June 30, 2018, and declared dividends for September, October and November 2018.

Overview of Results

(thousands of dollars
except per share
amounts)

Three Months Ended June 30

Six Months Ended June 30

2018

$

2017

$

2018

$

2017

$

Trade sales (1)(2)(4)

262,651

222,241

476,748

376,930

Adjusted EBITDA (1)(3)(4)

49,220

40,099

79,947

66,001

Profit

12,792

14,749

17,735

19,876

Diluted profit per share

$0.75

$0.88

$1.06

$1.22

Adjusted profit (1)

22,282

13,903

33,745

21,614

Diluted adjusted profit per share (1)(5)

$1.21

$0.84

$1.91

$1.33



(1)

See "Non-IFRS Measures".

(2)

See "Operating Results – Trade Sales" in the Q2 MD&A.

(3)

See "Operating Results - EBITDA and Adjusted EBITDA" in the Q2 MD&A.

(4)

The Company adopted IFRS 15 in 2018 without retrospective application and as a result in Q1 2018 recorded sales and adjusted EBITDA of $4.4 million and $1.5 million, respectively, that under IAS 18 had previously been recognized in 2017. For purposes of comparability, these amounts have been adjusted for in the 2017 figures in the above table.

(5)

See "Detailed Operating Results - Diluted profit per share and diluted adjusted profit per share".

 

Trade sales and adjusted EBITDA were at record levels in both the three and six-month periods ended June 30, 2018 due to continued momentum in international sales, a robust Canadian Commercial market and strong portable grain handling sales in the U.S. Excluding acquisitions, international sales increased 44% compared to the prior year, easily surpassing record highs due to continued strength in EMEA and higher sales in Brazil. Commercial activity in the Canadian fertilizer and grain segments remains very high due to the evolution of fertilizer distribution and expansion of the Canadian grain handling infrastructure. In the United States, prospects of another large crop and pent up demand have resulted in recovering sales of portable grain handling equipment. Adjusted EBITDA as a percentage of sales in Q2 increased to 18.7%, up significantly compared to Q1 2018 due to higher sales volumes, sales mix and a narrowing of the operating loss in Brazil. Higher adjusted EBITDA was offset by a translation loss on foreign exchange, resulting in lower profit and profit per share, while adjusted profit and adjusted profit per share increased significantly compared to 2017.

"We had an outstanding effort from teams throughout AGI in the second quarter.", said Tim Close, President and CEO of AGI. "Our Farm group delivered solid results, including significant sales growth in the US, strong sales in Canada and consistent margins in an environment of volatile input prices.  Significant growth in our Commercial business was driven by a robust market in Canada and record international sales.  All in, the broad based, strong performance across AGI pushed organic growth to 12% in the quarter.  The outlook across AGI continues to be positive. 

Subsequent to the quarter we bolstered our Food platform with the acquisition of Sabe in France.  Sabe is a strategic addition to the group that brings all of the elements we look for in a new member of the AGI family, including an excellent group of very talented people who consistently deliver high quality projects, leading to their customers placing a great deal of confidence in the Sabe team over and over again.  We are very happy to welcome Arnaud Meynial, Patrice Perraud, Yohan Texier and the entire Sabe team to the AGI family.  Our teams are already busy on integration and collaborating on initiatives to work together globally."

Diluted profit per share and diluted adjusted profit per share

A reconciliation of profit and diluted adjusted profit per share to adjusted profit and adjusted diluted profit per share is below.

(thousands of dollars
except per share
amounts)

Three Months Ended June 30

Six Months Ended June 30

2018

$

2017

$

2018

$

2017

$

Profit

12,792

14,749

17,735

19,876

Diluted profit per share

0.75

0.88

1.06

1.22






Loss (gain) on foreign exchange

6,632

(4,034)

12,333

(4,616)

Fair value of inventory from acquisition (2)

597

2,503

1,183

2,731

M&A expenses

700

477

868

1,087

Other transaction expenses (3)

2,287

3,754

2,423

5,125

Gain on financial instruments

(1,012)

(3,576)

(1,245)

(2,601)

Loss on sale of PP&E

286

30

216

12

Impairment charge (4)

-

-

232

-

Adjusted profit (1)

22,282

13,903

33,745

21,614

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