Winnipeg, Manitoba
June 7, 2007
Agricore United
(TSX:AU) announced today earnings before interest, taxes,
depreciation and amortization (“EBITDA”) of $45.5 million for
the six months ending April 30, 2007. The $30.8 million increase
over the same period last year is attributable to significantly
improved segment operating results and tightly controlled
operating, general and administrative (OG&A) expenses.
“Second quarter results are
usually a sign of things to come in the year, and these results
show the true
momentum in Agricore United’s operations,” says Brian Hayward,
Chief Executive Officer. “Not only have we
seen a strong recovery in sales of crop inputs, we are also
seeing year-to-year improvements in grain
shipments.”
Grain shipments for the six months
increased by 121,000 tonnes to 5.5 million tonnes, an increase
of just
over two percent. Agricore United’s ratio of industry grain
shipments for the trailing twelve months ended
April 30, 2007, increased to 34.6 percent, compared to a 33.6
percent market share reported for its fiscal
year ended October 31, 2006. Meanwhile, grain handling expenses
for the current fiscal year to date
decreased by $6.7 million (or 8.9 percent) as the result of
continuing improvements in operating efficiencies.
With the higher volumes, margins and reduced expenses, EBITDA in
the grain segment was a record $32.8
million for the quarter, contributing to EBITDA for the fiscal
year to date of $55.7 million, or almost 40 percent
more than the same period last year.
Crop Production Services (“CPS”)
sales have also seen a strong recovery in the second quarter of
2007,
with EBITDA of $10.2 million for the quarter ending April 30,
2007, $14.2 million higher than the loss of $4
million reported in the same quarter last year. Increased sales
activity in all product lines including seed,
crop nutrition and crop protection products resulted in gross
profit and revenue from services of $35.1 million
for the quarter and $44.0 million for the first six months of
2007. The reported $16.4 million increase in gross
profit and revenue from services for the six month period is
primarily attributable to higher fertilizer volumes
and margins in 2007 compared to the same period in 2006 as a
result of heightened demand and improved
commodity prices in the market this year.
Record earnings continued in
Agricore United’s Livestock Services segment, with feed volumes
increasing
by 293,000 tonnes to 813,000 tonnes during the six months ending
April 30, 2007. Gross profit and net
revenue in this segment increased to $20.4 million for the
quarter, contributing to the total of $41.2 million
reported for the first six months of 2007. The increase in gross
profit is due mainly to the acquisition of Hi-
Pro Feeds (“Hi-Pro”) which closed in August of 2006. After the
additional OG&A expenses associated with
Hi-Pro, the company reported a 48 percent increase in EBITDA to
a record $15.4 million for the six month
period ending April 30, 2007.
Legal, financial and other
advisory costs associated with the response to the Saskatchewan
Wheat Pool
(“SWP”) bid and related negotiations with James Richardson
International Limited were $5.4 million for the
current quarter, with total costs for the six month period
ending April 30, 2007 at $8.2 million. On May 29,
2007, SWP announced it had taken up more than 75 percent of the
issued and outstanding Limited Voting
Common Shares of Agricore United.
“It was a long process to get to
the end of the takeover bid, but we are now ready to move to the
next phase
of integrating SWP and Agricore United,” says Hayward. “A good
deal of planning has gone into the
integration to date, and the level of cooperation among
employees in both organizations has been
commendable.”
Agricore United is one of
Canada's leading agri-businesses with headquarters in Winnipeg,
Manitoba and extensive operations and distribution capabilities
across western Canada, as well as operations in the United
States and Japan. Agricore United uses its technology, services
and logistics expertise to leverage its network of facilities
and connect 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". |
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