Agricore United's Crop Production Services (CPS) segment continued its second quarter comeback, with crop nutrient, crop protection and seed sales for the third quarter increasing by 5 percent over the same period last year and contributing to a $63 million (or 9 percent) increase in sales for the nine months ending July 31, 2005. These sales, combined with improved Livestock Services feed and non-feed sales and margins, were the main contributors to $47 million in net earnings for the third quarter ($1.04 earnings per share) and $22 million for the nine months ($0.47 earnings per share and $12 million better than 2004).

"Our third quarter is traditionally the strongest for seasonal CPS sales and this year we¡¦ve seen the industry as a whole return to a more normal experience, despite unseasonably wet conditions which limited producer purchases in Manitoba in particular," says Brian Hayward, Chief Executive Officer. "In our grain handling segment, average margin increased to $21.80 per tonne, although this was more than offset by delays in industry-wide grain movement and therefore our own grain shipments this year."

Western Canadian grain production in 2004 increased 11 percent to about 51 million tonnes. However, industry-wide grain shipments for the nine months ended July 31, 2005 declined by 1.3 percent reflecting lower than expected deliveries into the primary elevator system. This delay in deliveries was consistent with Statistics Canada¡¦s estimate of a 4.6 million tonne increase in carry-out stocks at July 31, 2005 and largely reflected producer decisions as to the timing of delivery.

For the second quarter in a row, Agricore United reduced Operating, General and Administrative expenses by $2 million (or 1.8 percent) during the quarter ended July 31, 2005. With the added benefit of lower current income taxes due to the Company¡¦s loss carry-forwards, cash flow provided by operations of $80 million ($1.74 per share) for the nine months improved $14 million or $0.30 per share over last year.

Despite the dampening effect of lower grain handling volume on earnings and cash flow, the improvements in other business segments enabled the Company to further reduce its leverage while maintaining its current ratio. Average net funded debt decreased to $428 million for the 12 months ended July 31, 2005 from $509 million one year ago. Consequently, the Company¡¦s average leverage ratio improved to 42.6 percent compared to 46.2 percent for the same 12 month period ended July 31, 2004. The Company¡¦s improved liquidity also generated free cash flow (cash flow provided by operations less net capital expenditures and investments) of $28 million for the 12 months ended July 31, 2005.

Agricore United's Board of Directors today declared an annual dividend of $1.00 per share on the Series A Convertible Preferred Shares and a dividend for the quarter of $0.03 per share on the Limited Voting Common Shares. Each dividend is payable on November 15th, 2005 to shareholders of record at the close of business on October 14, 2005.


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.