RIVERLAND AG HAS NOW BEEN OWNED FOR FOUR FULL QUARTERS
TORONTO, Sept. 7, 2011 /CNW/ - Ceres Global Ag Corp. ("Ceres" or the
"Corporation") is pleased to announce its results for the first fiscal
quarter ended June 30, 2011.
As of June 30, 2011, Ceres has owned its operating subsidiary, Riverland
Ag Corp. ("Riverland Ag") for four full quarters. Since acquiring
Riverland Ag in June 2010, Ceres has worked closely with Riverland Ag's
management team to improve operating and reporting systems, enhance
risk management practices, identify and pursue strategic priorities and
initiatives, and complete several capital investment projects. To fund
future strategic investments and cereal grain market opportunities, the
remaining portfolio investments within Ceres have largely been
converted to cash. Riverland Ag's bank lines have been increased.
The following are strategic initiative highlights for the quarter ended
June 30, 2011:
The 2.3 million bushel expansion of Riverland Ag's Malt One facility in
Minneapolis was substantially completed and is now ready to receive
grain from the 2011 harvest;
The purchase of a 4.5 million bushel grain storage facility in
Manitowoc, Wisconsin was negotiated (the transaction closed in July);
The amount available under Riverland Ag's committed revolving line of
credit was increased from USD$115 million to USD$180 million.
Shortly after the end of the first quarter, Mr. Craig Reiners was
appointed to the position of Chief Operating Officer of Riverland Ag.
Mr. Reiners, a highly recognized leader in the grain industry, will
enhance Riverland Ag's existing expertise in risk management, grain
storage operations and customer relationships.
The following is a summary of financial results for the fiscal quarter
ended June 30, 2011, for both Ceres on a consolidated basis and for its
operating subsidiary Riverland Ag:
(Note: The comparative amounts below for the quarter ended June 30, 2010
includes only 19 days of results for Riverland Ag.)
Consolidated and Riverland Ag revenues were $89.6 million (2010: $17.9
Consolidated and Riverland Ag gross profit was $6.2 million (2010: $1.1
Consolidated EBITDA was $3.5 million (2010: $7.2 million) representing
EBITDA per share of $0.23 (2010: $0.55);
Riverland Ag EBITDA was $5.3 million (2010: $1.1 million) representing
EBITDA per share of $0.35 (2010: $0.08);
Consolidated net income was $345,000 (2010: $6.6 million), representing
basic and fully diluted earnings per share of $0.02 for 2011 (2010:
$0.50). Included in net income for 2010 was a gain on the acquisition
of Riverland Ag Corp. of $23.0 million);
Riverland Ag's net income was $2.2 million (2010: $434,000),
representing basic and fully diluted earnings per share of $0.14 (2010:
As at June 30, 2011, cash and remaining portfolio investments totalled
$60.9 million, representing $4.02 per share as at that date; and,
As at June 30, 2011, consolidated shareholders' equity per common share
was $10.58 (March 31, 2011: $10.59).
Revenues were higher in the quarter and inventories were lower at the
end of the quarter as a result of active delivery against its future
contracts and merchandising opportunities in the quarter. Overall,
gross profit and EBITDA maintained the levels of the previous quarter
ended March 31, 2011.
The interim condensed consolidated financial statements for the quarter
ended June 30, 2011 and the notes related thereto, and the Interim
Management's Discussion and Analysis are available under Ceres profile
on www.sedar.com and have been posted on the company's web site at www.ceresglobalagcorp.com. Unless otherwise indicated, all amounts are reported in Canadian
Over the last four full quarters since the purchase of Riverland Ag,
Riverland Ag has reported aggregate EBITDA of $20.1 million,
aggregating $1.32 per Ceres common share, and aggregate net income of
$8.5 million representing $0.56 per Ceres common share.
"We were very pleased to complete the expansion of the Malt One facility
in Minneapolis, and to have negotiated the acquisition of a 4.5 million
bushel facility in Wisconsin," said Michael Detlefsen, President of
Ceres, "and we continue to actively pursue a large number of both
internal and external growth opportunities."
Jason Gould, Chief Financial Officer of Ceres, said: "We continue to
liquidate our remaining portfolio investment and are in a strong
position to support further investments in the growth of Riverland Ag
and related businesses. As well, the expansion of Riverland Ag's credit
facilities ensures that it has sufficient financial flexibility to
pursue opportunities in the grain markets."
Recent Industry Developments
In August 2011, the Government of Canada announced its intention to
introduce legislation this autumn, which will end the Canadian Wheat
Board's marketing monopoly on wheat and barley. The legislation is
expected to take effect August 2012, the beginning of the 2012/13 crop
Also in August 2011, the Minneapolis Grain Exchange announced that it
has removed the U.S origin condition for wheat delivered against its
Hard Red Spring Wheat futures contract, effective no later than the May
While it is unclear what effect these developments will have on
Riverland Ag, management believes these changes will be positive given
the nature and location of Riverland Ag's assets.
Non-IFRS Financial Measure
EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)
is not a standardized financial measure prescribed by IFRS; however,
management believes that most of its shareholders, creditors, other
stakeholders and investment analysts benefit from using this
performance measure in analyzing Ceres' results. Ceres also uses this
measure internally to monitor the Corporation's performance.
In calculating EBITDA, Ceres excludes its share of the net income or
loss from investments in associates. Ceres may calculate EBITDA
differently than other companies; therefore, Ceres' EBITDA may not be
comparable to similar measures presented by other issuers. Investors
are cautioned that 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.
About Ceres Global Ag Corp.
Ceres Global Ag Corp. owns 100% of Riverland Ag Corp. and has
significant capital available to invest in this and related businesses.
Riverland Ag Corp. is an agricultural grain storage and supply chain
business operating 15 grain storage facilities in Minnesota, North
Dakota, Wyoming, New York, Wisconsin and Ontario having aggregate
storage capacity of approximately 55 million bushels. Ceres common
shares trade on the Toronto Stock Exchange under the symbol "CRP".
This news release contains forward-looking statements concerning the
Corporation's business and operations. The Corporation cautions that,
by their nature, forward-looking statements involve risks and
uncertainty. The Corporation's future actual results could vary
materially from those expressed or implied in such statements.
Reference should be made to the Corporation's annual audited financial
statements, its management discussion and analysis, or the initial
public offering prospectus dated December 13, 2007 for a description of
the major risk factors.
SOURCE Ceres Global Ag Corp.
For further information:
Jason Gould, Chief Financial Officer, at (416) 915-2426.