Agricore United continued to see improved earnings from higher grain handling volumes and stronger grain margins per tonne through the second quarter of 2004. Agricore United’s net loss of $17 million or $0.40 per share for the second quarter of 2004 improved by $5 million from a net loss of $22 million or $0.51 per share for the same quarter last year.

Company grain shipments for the three months ended April 30, 2004 were up 57 percent over the same period last year while grain margins for the quarter increased to $18.93 per tonne from $17.41 per tonne last year. Improved grain handling and margins were the primary drivers of a $7 million increase in quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) and a $16 million increase in EBITDA to $14 million for the six months ended April 30, 2004.

“By maintaining our market share, our grain shipments have improved dramatically with increased industry handling of last year’s crop,” says Brian Hayward, Chief Executive Officer. “With the improved moisture received this spring, we’re increasingly optimistic about the prospects for at least normal production levels this year that will then be available for shipping next fiscal year.”

Agricore United’s sales of seed, crop nutrients, crop protection and related products for the six months ended April 30, 2004 increased modestly to $157 million compared to $155 million for the same period last year. Subsequently, high precipitation affected the timing of crop input activities and delayed sales of crop nutrients and crop protection products during May.

Manufactured feed sales improved modestly despite the continuing negative effects on the livestock industry from restrictions on the export of live beef cattle. The company sold 216,000 tonnes in the latest quarter, an improvement of 12,000 tonnes or 6 percent from the same quarter last year.

The Company’s operating, general and administrative expenses did not increase significantly despite sustained sales activity for Crop Production Services and dramatically higher grain shipments in the quarter and year-to-date. The Company’s net loss of $29 million ($0.71 per share) for the six months ended April 30, 2004 was $12 million better than the net loss of $42 million or $0.97 per share for the same six-month period last year. Cash flow used in operations of $11 million ($0.32 per share) for the latest six-month period improved $15 million from cash flow used in operations of $26 million ($0.65 per share) last year.

The Company’s balance sheet remains healthy with uncommitted short-term borrowing capacity increasing from a seasonal low of $34 million at April 30, 2004 to $186 million at June 1, 2004. The Company’s weighted average leverage ratio for the 12 months ended April 30, 2004 was 46% ? close to its long-range targets.

Agricore United is one of Canada’s leading agri-businesses. The prairie-based company is diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial markets. Agricore United’s shares are publicly traded on the Toronto Stock Exchange under the symbol “AU”.

Complete quarterly results in PDF Format:
http://www.agricoreunited.com/AU/Invest/Reports/2004_q2_report_au.pdf