Friday, September 7th, 2012 - Viterra

CALGARY, ALBERTA -- (Marketwire) -- Sep 06, 2012 -- Viterra Inc. ("Viterra") (TSX: VT) (ASX: VTA) announced today impressive results for the three months ended July 31, 2012. Driven by strong performance from the Agri-Products segment, Viterra achieved EBITDA for the quarter of $288 million, an increase of 15% compared to $251 million in the corresponding quarter of fiscal 2011. Net earnings decreased 10% to $111 million ($0.30 per share) compared to $123 million ($0.34 per share) in the same quarter last year after the Company recorded a one-time income tax item of $31 million and $21 million in the costs associated with the early redemption of Company bonds.

"Viterra once again achieved impressive quarterly results," commented Mayo Schmidt, Viterra's President and CEO. "For the year our Agri-Products business segment has delivered record results. Our Grain Handling and Processing business segments have also performed well. I am very pleased that our Viterra team remains focused on strong operational performance while we work to complete the transaction with Glencore."

Financial Highlights

(in thousands - except per share amounts)

                       Three Months                    Nine Months                                  ended July 31,    Better      ended July 31,   Better                        2012      2011   (Worse)      2012      2011  (Worse) ----------------------------------------------------------------------------   EBITDA              287,964   251,264    36,700   661,824   590,040   71,784 Net earnings        111,064   123,487   (12,423)  255,867   254,327    1,540   Earnings per                                                                  share           $   0.30  $   0.34  $  (0.04) $   0.69  $   0.68 $   0.01 Operating cash                                                                flow prior to                                                                working capital    226,414   222,726     3,688   491,028   485,003    6,025 changes from                                                                  continuing                                                                   operations                                                                0   Per share        $   0.61  $   0.60  $   0.01  $   1.32  $   1.30 $   0.02 Free cash flow                                                                from continuing                                                              operations         277,328   275,732     1,596   650,301   620,261   30,040  
1 See Non-GAAP Measures at the end of this news release.

The Agri-Products segment improved its quarterly results over the prior year due to strong fertilizer pricing, the new fuel business in Western Canada and higher crop protection product sales. Favourable weather across the Canadian prairies and strong commodity prices led to higher canola and overall seeded acreage which supported increased demand for agri-products. The segment achieved EBITDA for the third quarter of $195 million compared to $163 million from the same period last year, and year-to-date achieved record EBITDA of $273 million. Fertilizer margins increased during the quarter to $187.44 per tonne (2011 - $143.92 per tonne), bringing the year-to-date margin to $157.74 per tonne (2011 - $126.46 per tonne).

Grain Handling and Marketing's EBITDA was $103 million in the third quarter versus $106 million in the same period last fiscal year. During the third quarter, lower global shipping volumes were offset by stronger grain handling margins and solid results from the Company's international grain marketing activities. On a year-to-date basis, the consolidated global pipeline margin increased to $39.54 per tonne compared to $36.80 per tonne a year earlier.

The Processing segment's EBITDA for the third quarter improved to $31 million compared to $28 million in 2011. Improved results from canola, malt, and oats were in part offset by the pasta operation, which is experiencing competitive pricing pressures. The food processing margin for the third quarter decreased to $108.03 per tonne compared to $120.77 per tonne last year due to lower pasta margins and a change in product mix as there are now more canola volumes given the new crush facility in China.

On a year-to-date consolidated basis, EBITDA was $662 million compared to $590 million in the prior year while net earnings were $256 million ($0.69 per share) versus $254 million ($0.68 per share) in the corresponding period of fiscal 2011.

For the third quarter of fiscal 2012, Viterra generated operating cash flow prior to working capital changes from continuing operations of $226 million ($0.61 per share) compared to $223 million ($0.60 per share) a year earlier. This increase was mainly attributable to impressive performance from the Agri-Products segment. During the third quarter Viterra generated free cash flow from continuing operations of $277 million, comparable to the $276 million generated in the corresponding period of fiscal 2011.

Third Quarter Segment Highlights

(in thousands - except per share amounts)

                                                  Three Months                                                               ended July 31,       Better                                               2012         2011      (Worse)  ---------------------------------------------------------------------------- Grain Handling and Marketing Segment                                           Revenue                             $ 2,213,403  $ 2,186,811  $    26,592    Gross Profit                            207,232      207,214           18    EBITDA 1                                102,811      106,161       (3,350)     Operating Highlights (Tonnes)                                         0      North American Shipments                3,730        3,652           78      Australian Receivals                        5          271         (266)     Total Pipeline                          3,735        3,923         (188)   Consolidated Pipeline Margin (per                                             tonne)                                     N/A          N/A          N/A  Agri-Products Segment                                                          Revenue                             $ 1,308,928  $ 1,134,746      174,182      Fertilizer                            610,488      535,503       74,985      Crop Protection                       360,893      317,664       43,229      Seed                                  119,019      120,321       (1,302)     Wool                                   90,883      115,352      (24,469)     Fuel                                   59,361            0       59,361      Equipment sales and other                                                     revenue                               62,981       39,753       23,228      Financial products                      5,303        6,153         (850)   Adjusted Gross Profit                   273,628      229,184       44,444    EBITDA 1                                194,521      162,706       31,815    Fertilizer volume (tonnes)                  848          876          (28)   Fertilizer margin (per tonne sold)  $    187.44  $    143.92        43.52  Processing Segment                                                             Revenue                             $   326,668  $   242,764       83,904    Adjusted Gross Profit 1                  44,778       40,081        4,697    EBITDA 1                                 31,477       27,506        3,971    Sales volumes (tonnes)                                                         Malt                                      148          131           17      Pasta                                      57           54            3      Oats                                       95           90            5      Canola                                    129           38           91      Feed                                       21           29           (8)   Operating Margin (per tonne sold)                                              Average margin - food processing  $    108.03  $    120.77       (12.74)     Average margin - feed processing        53.90        25.66        28.24  Corporate Expenses                                                             Operating, general and                                                        administrative expenses            $    44,710  $    47,360        2,650                                                      Nine Months                                                               ended July 31,       Better                                               2012         2011      (Worse)  ---------------------------------------------------------------------------- Grain Handling and Marketing Segment                                           Revenue                             $ 7,987,305  $ 6,174,685  $ 1,812,620    Gross Profit                            752,979      719,826       33,153    EBITDA 1                                427,243      429,642       (2,399)     Operating Highlights (Tonnes)                                         0      North American Shipments               12,430       10,778        1,652      Australian Receivals                    6,614        8,780       (2,166)     Total Pipeline                         19,044       19,558         (514)   Consolidated Pipeline Margin (per                                             tonne)                             $     39.54  $     36.80         2.74  Agri-Products Segment                                                          Revenue                             $ 2,416,947  $ 1,861,058      555,889      Fertilizer                          1,135,154      864,892      270,262      Crop Protection                       405,476      340,686       64,790      Seed                                  291,843      233,064       58,779      Wool                                  357,180      339,821       17,359      Fuel                                  112,813            0      112,813      Equipment sales and other                                                     revenue                              101,382       68,363       33,019      Financial products                     13,099       14,232       (1,133)   Adjusted Gross Profit                   454,500      349,304      105,196    EBITDA 1                                273,440      194,978       78,462    Fertilizer volume (tonnes)                1,681        1,528          153    Fertilizer margin (per tonne sold)  $    157.74  $    126.46        31.28  Processing Segment                                                             Revenue                             $   964,050  $   707,127      256,923    Adjusted Gross Profit 1                 122,763      120,405        2,358    EBITDA 1                                 82,310       85,405       (3,095)   Sales volumes (tonnes)                                                         Malt                                      387          376           11      Pasta                                     167          164            3      Oats                                      267          284          (17)     Canola                                    387          118          269      Feed                                       85          104          (19)   Operating Margin (per tonne sold)                                              Average margin - food processing  $    100.56  $    122.70       (22.14)     Average margin - feed processing        35.26        26.20         9.06  Corporate Expenses                                                             Operating, general and                                                        administrative expenses            $   131,483  $   126,878       (4,605)  
1 See Non-GAAP Measures at the end of this news release.

New Crop Update

Across the Canadian Prairies, harvest is in the early stages, with above average yields and quality. This should continue provided favourable weather continues through the duration of harvest. According to Statistics Canada's August 22, 2012 field crop reporting series release, western Canadian production of the six major grains is predicted to be 55.5 million tonnes. This represents an increase of 13% from the 49.3 million tonnes produced in the 2011 harvest and an increase from the 5-year historical average production of about 53.0 million tonnes. Statistics Canada is also estimating an additional 3.3 million tonnes of lentils and other crops. The quality of the crop in Western Canada looks promising but is dependent on favourable harvest weather for the next couple of months.

In South Australia, seeding finished in late June and good growing conditions exist throughout the majority of the state. The Australian Bureau of Agriculture and Resources Economics and Sciences ("ABARES") is predicting that the current crop will produce 6.9 million tonnes. This represents a 12% increase from the 10-year average for the state. Crop quality in the state is good at this time. Approximately 85% of the crop is currently expected to be wheat and barley.

Outlook

Grain Handling and Marketing

For fiscal 2013, assuming production estimates hold, Viterra anticipates CGC receipts for the six major grains in Western Canada to be in the 33.0 to 35.0 million tonne range, which is higher than the 32.0 million tonnes that is typically available.

For Viterra's South Australia grain handling operations, the Company expects shipments to be strong for the remainder of the year given the volume of grain in its system and ongoing solid demand from key export markets. To complement the 6.6 million tonnes received into the Company's system during the first nine months of fiscal 2012, there was approximately 1.8 million tonnes of carry-in stocks from fiscal 2011. Viterra currently estimates carry-over stocks into fiscal 2013 to range between 0.7 million and 1.0 million tonnes.

The Company reiterates its global pipeline margin guidance for fiscal 2012 at $38 to $41 per tonne.

Agri-Products

Fundamentals for the Agri-Products segment are expected to remain strong in the last quarter of fiscal 2012 due to relatively strong commodity prices that should continue to drive solid returns for producers and their demand for crop inputs. Viterra is increasing its fertilizer margin guidance to $140 to $160 per tonne for fiscal 2012 from its previous guidance range of $120 to $140 per tonne. Strong agri-commodity pricing, increased seeded acreage in Western Canada and higher nutrient requirements from excess moisture in the last two years have supported strong fertilizer demand in fiscal 2012. 

Contact Profile

Viterra Inc. Holly Gibney Media Inquiries

P: +1 403 817-1088
W: www.viterra.com

Keywords

Agri-Products

Categories

Sharing

More Formats