MINNEAPOLIS, May 12, 2023
/CNW/ - Ceres Global Ag Corp. (TSX: CRP) ("Ceres" or
the "Corporation") today announced its financial and
operating results for the three and nine-month periods ended
March 31, 2023. All amounts are in
U.S. dollars unless otherwise noted.
Highlights for the quarter ended March
31, 2023
(Comparisons to the quarter ended
March 31, 2022)
- Gross profit for the quarter was $5.5
million, down from the previous year, which was one of the
most profitable years in the history of the Corporation;
- Income from operations was $339
thousand compared to $3.6
million in the previous year;
- Net loss for the quarter was $553
thousand and adjusted net income for the quarter was
$410 thousand. Please refer to
Non-IFRS Financial measures and reconciliations for more
details;
- The Corporation handled and traded 24.1 million bushels, up 20%
from 20.1 million bushels in the prior year;
- On February 17, 2023, the
Corporation completed the sale of its Port Colborne facility for $4.0 million and recognized a gain on the sale of
$1.2 million.
CEO Commentary
"While markets remain volatile, mostly due to the ongoing
conflict in Ukraine and mixed
results from the South American crop season, the Ceres team
skillfully navigated these erratic markets and effectively utilized
the Company's asset network, resulting in another quarter with
positive adjusted net income. This quarter, Ceres handled 20%
higher volumes compared to last year and year-to-date handled
volumes have surpassed fiscal 2022 volumes by 6%. One of the key
contributors to these strong results was the performance of our
joint venture in Berthold Farmers Elevator, where volumes handled
have increased by 15%, demonstrating its continued value."
Summary Financial and Operational Results
(in thousands of
USD
except per share amounts)
|
3-Months Ended
March 31, 2023
|
3-Months Ended
March 31, 2022
|
9-Months Ended
March 31, 2023
|
9-Months Ended
March 31, 2022
|
Revenue
|
287,912
|
269,625
|
831,051
|
782,791
|
Gross profit
|
5,513
|
12,265
|
17,825
|
52,182
|
Income from
operations
|
339
|
3,597
|
(864)
|
24,302
|
Net income
(loss)
|
(553)
|
912
|
(5,408)
|
13,714
|
Earnings (loss) per
basic
share
|
(0.02)
|
0.03
|
(0.17)
|
0.45
|
Adjusted net
income2
|
410
|
2,457
|
1,366
|
16,796
|
Adjusted
EBITDA1
|
2,208
|
5,389
|
4,442
|
29,313
|
1, 2. See the
Non-IFRS Financial Measures and Reconciliations
section
|
Outlook
Mr. Paz added, "While we are expecting delays in planting for
North American crops due to the cool, wet spring in the Northern
Plains and Canadian Prairies, we believe current elevated prices
for core products will encourage farmers to maximize the acres
planted, which should result in adequate volumes to merchandise
barring adverse summer weather. Our team is assessing crops closely
to best capitalize on market opportunities as they arise."
"One of Ceres' greatest competitive advantages is our network of
partners, who we have built longstanding and trusted relationships
with over the years. The success of these partnerships is borne out
by our ability to leverage the trade flows developed over the past
several years. Going forward, we will continue to focus on
maximizing the full value of these assets and find creative ways to
partner with independent co-ops to increase Ceres' farmer direct
origination in order to keep up with the increasing demand for
supply chain and regenerative agriculture solutions."
Conference Call Details
Management of Ceres will host a conference call today,
May 12, 2023, at 09:00 a.m. ET. All interested parties can join
the conference call by dialing 1-888-390-0605 or 416-764-8609. The
conference call ID is 86523057. Please dial in 15 minutes prior to
the call to secure a line.
A live audio webcast of the conference call will be available
at: https://app.webinar.net/rbpWKVXEvyA. Please connect at least 15
minutes prior to the conference call to ensure adequate time for
any software download that may be required to join the webcast. An
archived replay of the webcast will be available for 90 days.
Non-IFRS Financial Measures and Reconciliation
1.Adjusted EBITDA (adjusted Earnings before Interest,
Taxes, Depreciation and Amortization) is not a standardized
financial measure prescribed by IFRS; however, it is a metric that
is used by management to determine the Corporation's ability to
service its debt and finance capital.
In calculating adjusted EBITDA, Ceres excludes gains and losses
on property, plant and equipment, assets held for sale, and gains
and losses on equity investments. Ceres may calculate adjusted
EBITDA differently than other companies; therefore, Ceres' adjusted
EBITDA may not be comparable to similar measures presented by other
issuers.
Investors are cautioned that adjusted EBITDA should not be
construed as an alternative to net income or loss, or to other
standardized financial measures determined in accordance with IFRS
and is not intended to represent cash flows or results of
operations in accordance with IFRS. See the table below for the
reconciliation of adjusted EBITDA.
(in thousands of
USD)
|
3-Months Ended
March 31, 2023
|
3-Months Ended
March 31, 2022
|
9-Months Ended
March 31, 2023
|
9-Months Ended
March 31, 2022
|
Net income (loss) for
the period
|
(553)
|
912
|
(5,408)
|
13,714
|
Interest
expense
|
1,614
|
1,179
|
4,972
|
3,644
|
Amortization of
intangible assets
|
62
|
66
|
186
|
197
|
Income tax
(recovery)
|
(118)
|
1,362
|
472
|
6,251
|
Share of net (income)
loss in
investment in associates
|
821
|
112
|
652
|
225
|
Depreciation and
amortization
|
1,595
|
1,770
|
4,798
|
5,301
|
Gain (loss) on
property, plant and
equipment
|
(1,213)
|
(12)
|
(1,230)
|
(19)
|
Adjusted
EBITDA
|
2,208
|
5,389
|
4,442
|
29,313
|
2. Adjusted net income is not a standardized
financial measure prescribed by IFRS; however, it is a metric that
the Corporation believes can provide useful information to
investors and shareholders as it can be used to evaluate the
performance of the business. Adjusted net income excludes major
one-time write offs, such as severance and employee cost reduction
measures, as well as legal fees that relate to DOJ and CFTC
investigations. See the table below for the reconciliation of
adjusted net income.
(in thousands of
USD)
|
3-Months Ended
March 31, 2023
|
3-Months Ended
March 31, 2022
|
9-Months Ended
March 31, 2023
|
9-Months Ended
March
31, 2022
|
Net income (loss) for
the period
|
(553)
|
912
|
(5,408)
|
13,714
|
Executive severance
and
employee cost reduction
|
15
|
-
|
2,354
|
-
|
Regulatory
investigations - legal
related costs
|
948
|
1,545
|
4,420
|
3,082
|
Adjusted net
income
|
410
|
2,457
|
1,366
|
16,796
|
About Ceres Global Ag Corp.
Ceres and its subsidiaries add value across agricultural, energy
and industrial supply chains through efficient sourcing, storing,
transporting and marketing of high–quality agricultural
commodities, value– added products and raw materials. Leveraging
its network of commodity logistics centers and team of industry
experts, Ceres connects farmers to customers around the world.
Ceres is headquartered in Golden
Valley, Minnesota, and together with its affiliated
companies, operates 11 locations across Saskatchewan, Manitoba, Ontario, and Minnesota. These facilities have an aggregate
grain and oilseed storage capacity of approximately 29 million
bushels.
Ceres has a 50% interest in Savage Riverport, LLC (a joint
venture with Consolidated Grain and Barge Co.), a 50% interest in
Berthold Farmers Elevator, LLC (a joint venture with The Berthold
Farmers Elevator Company), a 50% interest in Farmers Grain,
LLC (a joint venture with Farmer's Cooperative Grain and Seed
Association), a 50% interest in Gateway Energy
Terminal (an unincorporated joint venture with Steel Reef
Infrastructure Corp.), a 25% interest in Stewart Southern Railway
Inc. (a short–line railway located in southeast Saskatchewan with a range of 130 kilometers),
and a 17% interest in Canterra Seed Holdings Ltd. (a Canada–based
seed development company).
For more information about Ceres, please visit
www.ceresglobalagcorp.com
Forward-looking Statements
This news release
contains "forward-looking information" within the meaning of
applicable Canadian securities legislation and United States securities laws. Forward-looking
information may include, but is not limited to, statements
regarding future operations and results, anticipated business
prospects and financial performance of Ceres and its subsidiaries,
including the plans, costs, timing and capital for the further
development of the Northgate Commodities Logistics Centre,
expectations or projections about the future, strategies and goals
for growth, expected and future cash flows, costs, planned capital
expenditures, regulatory change, general economic political and
market conditions anticipated capital projects, construction and
completion dates, operating and financial results, critical
accounting estimates, the expected financial and operational
consequences of future commitments. Generally,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate",
"believes", "may have implications" or variations of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will be taken", "occur", or
"be achieved". Forward-looking information is based on the opinions
and estimates of management at the date the information is made and
is based on a number of assumptions and subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking information. Key assumptions upon which such
forward-looking information is based are listed in the
"Forward-Looking Information" section of the MD&A for the
period ended March 31, 2023. Many
such assumptions are based on factors and events that are not
within the control of Ceres and there is no assurance they will
prove to be correct. Factors that could cause actual results to
vary materially from results anticipated by such forward-looking
information include, among others, risks related to weather,
politics and governments, changes in environmental and other laws
and regulations, competitive factors in agricultural, food
processing and feed sectors, construction and completion of capital
projects, labour, equipment and material costs, access to capital
markets, interest and currency exchange rates, technological
developments, global and local economic conditions, the ability of
Ceres to successfully implement strategic initiatives and whether
such strategic initiatives will yield the expected benefits, the
operating performance of the Corporation's assets, the availability
and price of commodities and regulatory environment, processes and
decisions. Although Ceres has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
information, there may be other factors that cause actions, events
or results that are not anticipated, estimated or intended. There
can be no assurance that forward-looking information will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such information. Ceres
undertakes no obligation to update forward-looking information
if circumstances or management's estimates or opinions
should change, except as required by applicable securities
laws. The reader is cautioned not to place undue reliance on
forward-looking information.
SOURCE Ceres Global Ag Corp.