Ceres Global Ag Corp. (TSX: CRP) (“Ceres” or the “Corporation”) today announced its financial and operational results for the fiscal year ended June 30, 2017. All amounts are in U.S. currency unless otherwise noted.
“Despite encouraging signs early in the quarter, unfavorable market conditions resulted in financial results below our expectations,” said Robert Day, President and CEO of Ceres, “Export volumes and margins out of Duluth/Superior were a disappointment as U.S. prices of Spring Wheat and Durum were high and less competitive in the world market. Also, due to tight supplies in Canada at the end of the harvest year we were challenged to purchase product at Northgate to fill previously made sales.”
“While we missed our financial objectives for the quarter, we are encouraged by much of what was accomplished for the year. We closed and wrote down the Buffalo and Duluth Lakeport elevators, but at the same time we achieved our volume objective, trading and handling over 111 million bushels of grain & oilseeds and moving significantly more volume through the facilities we continue to operate. In doing so we have established several key supplier and customer relationships that we can build upon in 2017/18 and beyond.”
Mr. Day added, “In addition, we completed construction of our dry fertilizer storage and handling facility at Northgate safely, on time and under budget, and introduced several new industrial products to our non-Ag logistics business that have solid potential for growth. Lastly, losses for the year were nearly all attributable to non-cash expenses.”
Financial and Operational Highlights for Q4 FY2017
- Generated revenue of $112.2 million, a decrease of 3% from $115.8 million for the comparative quarter in FY2016.
- Gross profit was $0.1 million, down 95% from $1.9 million for the comparative period of FY2016, driven primarily by a reduction in net trading margin.
- Net loss was $4.0 million. This compares to a net loss of $1.5 million for the comparative period in FY2016. Operating and depreciation expenses increased during the quarter commensurate with the addition of Northgate assets, and general and administrative expenses increased with the addition of staff in the grain merchandising group and related support team.
- Handled approximately 29.7 million bushels of grains and oilseed through the company’s network of facilities in Q4 FY2017, a 6% increase from the 28.1 million bushels handled in the comparative period of last year.
Outlook
“By significantly increasing our volumes in fiscal 2017 we established several new trade flows and created many additional options around where we source and where we can take product. Having these options going forward positions us to more effectively deal with the kind of market adversity we faced last quarter,” said Mr. Day. “As we learn from the past, we are confident margins and overall performance will improve in the coming fiscal year. As such, we continue to focus on the following:
- Increase origination volume directly from farmers in the U.S. and Canada;
- Maximize volumes and value throughout our network to lower fixed costs per bushel handled;
- Invest in our infrastructure to broaden our capabilities and ability to handle more commodity product lines, with focus on pulses and specialty crops;
- Extend our reach to customers both in the U.S. and internationally; and
- Continue to hire quality people to add to our core of talented staff.”
- Conference Call Details
Ceres will hold a conference call to discuss its fourth quarter 2017 financial and operational results on Monday, September 25, 2017 at 10:00 a.m. ET. Robert Day, Ceres' President and CEO, and Mark Kucala, Ceres' CFO, will co-chair the conference call.
Source: CERES