Agricore United today announced net earnings of $12.5 million or $0.25 per share for the year ending October 31, 2005. Earnings were $22.7 million or $0.50 per share better than the $10.2 million loss last year. Cash flow provided by operations of $75.3 million or $1.64 per share was $23.5 million better than 2004 and provided $34 million in free cash flow. Higher free cash flow contributed to lower average net funded debt to capitalization of 43% for the year ended October 31, 2005.

Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by $25 million to $129 million in 2005. Specifically, an $81 million increase in crop input sales to $816 million, largely due to increased crop nutrient tonnes sold, coupled with improved margins, contributed $20 million of the improvement. In addition, livestock feed sales increased 97,000 tonnes (or 11%) on higher margins and with stronger gross profit from hog sales.

"Both the livestock services and crop inputs side of our business improved as expected in 2005, overcoming several years of particularly adverse weather and market conditions," says Brian Hayward, Chief Executive Officer.
"We have stuck to business fundamentals - control costs, maximize market share and margins - and with the inevitable improvement in business conditions, we have been able to capitalize on our operating leverage and favourable tax position."

Agricore United maintained a 35% market share of total industry shipments of the six major grains while also realizing average margins of $21.26 per tonne, comparable to the $21.34 per tonne earned in 2004. Farmer decisions as to timing of grain deliveries limited both industry and Company shipments to levels consistent with the prior year, despite the significant increase in the size of the 2004 crop to 51 million tonnes (or 5 million tonnes higher than 2003). However, the resulting 5 million tonne increase in carry-out stocks, coupled with another large crop of about 54 million tonnes for the major grains in 2005 provides the potential for a significant improvement in grain movement in 2006. Surface and sub-surface moisture levels are also high across western Canada heading into the 2006 growing season.

"In addition to one of the largest crops in 10 years, improved precipitation across the prairies and the continued financial resiliency of our customer base, the industry also saw satisfactory resolution of a variety of trade actions from beef to wheat," says Hayward. "While the further benefit of these favourable events on all of our business segments will not be fully realized until 2006 and beyond, Agricore United is well positioned geographically and operationally to take advantage of these opportunities as they present themselves."

Agricore United is one of Canada's leading agri-business with headquarters in Winnipeg, Manitoba and extensive operations and distribution capabilities across western Canada. Agricore United uses its technology, services and logistics expertise to leverage its network of facilities and connect prairie-based agricultural customers to domestic and international customers and suppliers. The company's operations are diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial services. Agricore United's common shares are traded on the Toronto Stock Exchange under the symbol "AU.LV".