Input Capital Corp. reported net income of $1.6 million on revenues of $10.4 million for the second quarter ended Sept. 30, the Reginabased commodities streaming company announced Thursday.
The second-quarter results represents a dramatic increase in Input's net income and revenue from the same period last year, which saw the company report net income of only $65,000 and revenue of just under $2 million. For the first half, Input posted net income of $1.84 million on revenues of $11.8 million, up from profits of $101,000 on revenues of $4.2 million in the first six months of the previous fiscal year.
Doug Emsley, president and CEO of Input, said the strong second-quarter results show the commodities streaming model is starting to gain traction with canola producers. "There seems to be strong interest on the part of farmers to do streaming-type deals to help fund their working capital,'' Emsley said.
In commodity streaming, Input enters into multi-year contracts with producers, in which Input purchases the canola at a fixed price from the producer, who can then use the cash for working capital. The producer can also share in any gains in the value of the crop when it's marketed, but Input takes the downside risk if the price goes down, Emsley said.
"That market is huge for us, and we're just scratching the surface,'' he said, adding Input has contracts with about 80 canola producers, compared with potentially 20,000 to 50,000 producers in Western Canada. "The market is big.''
Source : LeaderPost