Regina, Saskatchewan, Canada
January 20, 2009Strong
fundamental demand for Canadian agricultural ingredients along
with continued improvements in operating efficiencies throughout
the Company's value chain resulted in a record performance in
2008. Viterra generated net
income of $288.3 million for the year ($1.31 earnings per
share), up sharply from $116.5 million ($0.84 earnings per
share) earned during the same period in 2007.
For the year ended October 31, 2008, Viterra generated EBITDA
(earnings before interest, taxes, amortization, gain (loss) on
disposal of assets, integration expenses and recovery of
(provision for) pension settlement) of $532.6 million, an
increase of $266.8 million compared to the same 12-month period
of 2007. Higher gross margins and increased efficiencies in the
Grain Handling and Marketing, Agri-products and Agri-food
Processing segments were the main drivers for improved earnings
in 2008.
Mayo Schmidt, President and Chief Executive Officer, commented
on the significant earnings improvements, "Our continued focus
on operational excellence, together with our integration efforts
led to record performance this year. We successfully completed
the integration of Agricore United and its subsidiaries. In
fact, as of October 31, 2008, we delivered a total of $110
million in synergies and are confident that we will achieve a
full run rate of $116 million by January 31, 2009. Productivity
gains achieved through the integration, along with our focus on
continuous improvements throughout the entire value-added chain
had an extremely positive impact on our financial results for
2008".
With Viterra's change to its fiscal year-end last year, the 2007
results include performance for a 15-month period ended October
31, 2007. To assist with comparability, management has focused
its discussion in this release on the comparative 12-month
periods and the related quarters ended October 31, 2008 and
2007, respectively. Please note that Viterra's Annual
Consolidated Financial Statements, Notes and Management's
Discussion and Analysis ("MD&A") will be filed on SEDAR and
available on the Company's website (www.viterra.ca)
later today. A conference call is scheduled for 10:30 am EST
tomorrow morning. Details are available on Viterra's website,
under News Releases.
Fourth Quarter Consolidated Results
The Grain Handling and Marketing, Agri-products, Agri-food
Processing and the Financial Products segments drove higher
sales in the most recent quarter relative to the comparable
quarter of the prior year. Consolidated sales for the quarter
increased $430.9 million to $1.7 billion in 2008 and contributed
to further improvements in gross margins, which rose $43.1
million to $223.4 million for the quarter.
Consolidated EBITDA for the quarter improved by $38.0 million to
$100.3 million.
Consolidated net earnings were $46.8 million ($0.20 per share),
compared to net earnings of $0.8 million in the same quarter of
the prior year ($0.00 per share).
Viterra generated cash flow provided by operations of $73.1
million ($0.31 per share) for the three months ended October 31,
2008, compared to $39.2 million ($0.19 per share) in the same
three months of 2007.
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Fourth Quarter Operating Highlights
(in thousands - except percentages, margins and per share amounts)
For the three months ended October 31 Better
(Unaudited) 2008 2007 (1) (Worse)
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Operating Results
Sales and other operating revenues $ 1,716,818 $ 1,285,908 $ 430,910
Gross profit and net revenues from
services $ 223,432 $ 180,317 $ 43,115
Operating, general and administrative
expenses $ (123,174) $ (118,039) $ (5,135)
EBITDA $ 100,258 $ 62,278 $ 37,980
Amortization $ (30,226) $ (32,281) $ 2,055
EBIT $ 70,032 $ 29,997 $ 40,035
Integration expenses $ (2,358) $ (11,077) $ 8,719
Gain (loss) on disposal of assets $ (206) $ 2,481 $ (2,687)
Financing expenses $ (6,271) $ (14,151) $ 7,880
Net earnings $ 46,790 $ 842 $ 45,948
Basic and diluted earnings per share $ 0.20 $ - $ 0.20
Cash flow before working capital
changes $ 73,131 $ 39,175 $ 33,956
Cash flow per share - basic and
diluted $ 0.31 $ 0.19 $ 0.12
Property, plant and equipment
expenditures $ (20,409) $ (8,217) $ (12,192)
Grain Handling and Marketing Segment
Gross profit and net revenues from
services $ 108,727 $ 112,353 $ (3,626)
EBITDA $ 70,091 $ 62,414 $ 7,677
Sales and other operating revenues $ 1,182,716 $ 963,877 $ 218,839
(A) Industry receipts - six major grains
(tonnes) 8,526 8,521 5
Industry shipments - six major
grains (tonnes) 8,276 8,733 (457)
(B) Primary elevator receipts - six
major grains (tonnes) 3,684 3,748 (64)
Primary elevator shipments - (tonnes) 3,466 4,367 (901)
Six Major Grains 3,310 4,219 (909)
Industry terminal handle - six major
grains (tonnes) 5,741 6,933 (1,192)
Port terminal receipts (tonnes) 2,083 2,640 (557)
Market share (%) - Country Receipts
(B)/(A) 43.2% 44.0% (0.8 pt)
Margin ($ per grain tonne shipped) $ 31.37 $ 25.73 $ 5.64
Agri-products Segment
Gross profit and net revenue from
services $ 89,789 $ 41,979 $ 47,810
EBITDA $ 44,033 $ 9,214 $ 34,819
Sales and other operating revenues $ 308,072 $ 172,836 $ 135,236
Fertilizer (i) $ 228,087 $ 126,779 $ 101,308
Crop Protection $ 40,992 $ 26,385 $ 14,607
Seed $ 1,588 $ 1,612 $ (24)
Equipment sales and other revenue $ 37,405 $ 18,060 $ 19,345
Average Margin 29.1% 24.3% 4.8 pt
Agri-food Processing Segment
Gross profit and net revenues from
services $ 8,418 $ 7,029 $ 1,389
EBITDA $ 7,140 $ 6,047 $ 1,093
Sales and other operating revenues $ 54,187 $ 49,271 $ 4,916
Tonnes sold 80 106 $ (26)
Margin per tonne $ 105.23 $ 66.31 $ 39
Livestock Feed and Services Segment
Gross profit and net revenues from
services $ 11,077 $ 14,947 $ (3,870)
EBITDA $ (7,920) $ 2,532 $ (10,452)
Sales and other operating revenues $ 181,751 $ 108,529 $ 73,222
Feed sales (tonnes) 501 374 127
Feed margin ($ per feed tonne sold) $ 38.86 $ 48.17 $ (9.31)
Non-feed gross profit and net
revenue from services $ (8,390) $ (3,068) $ (5,322)
Financial Products Segment
EBITDA $ 3,907 $ 3,216 $ 691
Corporate Expenses
EBITDA $ (16,993) $ (21,145) $ 4,152
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(1) As restated, see note 2(p) of the Consolidated Financial Statements
(i) Consolidated sales from retail operations and Westco third party sales
Full release: http://cnrp.marketwire.com/cnrp_files/20090120-120vt.pdf
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