MINNEAPOLIS, Sept. 15,
2023 /CNW/ - Ceres Global Ag Corp. (TSX: CRP)
("Ceres" or the "Corporation") today announced its
financial and operating results for the fourth quarter and year
ended June 30, 2023. All amounts are
in U.S. dollars unless otherwise noted.
Highlights for the fourth quarter and fiscal year ended
June 30,
2023
(Comparisons to the fourth quarter and fiscal
year ended June 30, 2022)
- Gross profit for the quarter was $4.9
million, and $22.8 million for
the year;
- Net loss for the year was $7.9
million and adjusted net
income1 for the year was $3.1 million;
- The Corporation handled and traded 98.5 million bushels, up 2%
from 96.6 million bushels in the prior year;
- In line with Ceres' long-term strategy of optimizing its
footprint around core products and locations, the Corporation
completed the sale of its Port
Colborne facility on February 17,
2023. Total proceeds of the sale were $4.0 million, and the Corporation recognized a
gain on the sale of $1.2
million;
- On June 28, 2023, Ceres announced
its exit from the wholesale distribution of its seed business to
consolidate the Corporation's focus on the core business.
CEO Commentary
"Throughout the year, whether it was the unprecedent drought
that affected South American crops in the second quarter, the
ongoing conflict in Ukraine, or
the dry weather across the U.S. Northern Plains and the Canadian
Prairies in the fourth quarter, the Ceres team skillfully navigated
volatile market conditions and effectively positioned the business
to deliver another year of positive adjusted net income," commented
Carlos Paz, President and CEO of
Ceres.
"Our farmer-direct origination strategy continues to show strong
results, with volumes handled growing 2% this year compared to the
previous year despite challenging macro conditions. Key drivers of
this growth were our joint ventures with Berthold Farmers Elevator,
in North Dakota, and with Farmer's
Cooperative Grain and Seed Association in Thief River Falls, MN, where yearly volumes
handled increased by 17% and 177%, respectively, exemplifying our
ability to maximize our network of assets and deliver unique value
to our customers."
______________________________
|
1
|
Adjusted net income is
a non-GAAP financial measure. Please refer to "Non-IFRS Financial
Measures and Reconciliations" for more details.
|
Summary Financial and Operational
Results
(in thousands of
USD
except per share amounts)
|
3-Months Ended
June 30, 2023
|
3-Months Ended
June 30, 2022
|
12-Months Ended
June 30, 2023
|
12-Months
Ended June 30,
2022
|
Revenue
|
205,652
|
278,150
|
1,036,703
|
1,060,941
|
Gross profit
|
4,940
|
3,693
|
22,765
|
55,875
|
Income from
operations
|
(1,848)
|
(329)
|
(2,712)
|
23,973
|
Net income
(loss)
|
(2,504)
|
(22,537)
|
(7,912)
|
(8,823)
|
Earnings (loss) per
basic
share
|
(0.08)
|
(0.73)
|
(0.25)
|
(0.29)
|
Adjusted net
income2
|
1,461
|
5,028
|
2,827
|
21,824
|
Adjusted
EBITDA1
|
2,798
|
2,724
|
7,241
|
32,038
|
1, 2. See the
Non-IFRS Financial Measures and Reconciliations
section
|
Outlook
Mr. Paz added, "While markets have grown more accustomed to
geopolitical risks associated with the conflict in Ukraine and volatility has dampened since the
start of the war, the underlying risk remains, and the Ceres team
is keeping an eye on any changes that can lead to higher levels of
volatility returning to markets. Our team is also closely
monitoring and evaluating the quality and quantity of crops in the
Northern Plains and the Canadian Prairies to identify opportunities
to maximize the margins of the capacity handled and best serve our
end customers."
"This year, we made strategic changes to consolidate our
business and enhance efficiencies to set a solid foundation for
future success. We remain focused on our vision of partnering with
farmers and other suppliers to enable our customers to do great
things in the food, agriculture, and energy markets. Our team has
the expertise and the solid base to maximize our assets and
creatively partner with our network to increase Ceres'
farmer-direct origination."
"Driven by the increasing demand for regenerative agriculture,
our future growth will involve efficiently utilizing our capital
through creative marketing and origination to solidify strategic
trade flows. Effective trading and merchandising will remain the
underpinnings of our business as we continue to maximize the value
of our network of assets and deliver supply chain and regenerative
agriculture solutions for our customers."
Conference Call Details
Management of Ceres will host a conference call today,
September 15, 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 83420424. 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/kKOBoNmJWGd. 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
June 30, 2023
|
3-Months Ended
June 30, 2022
|
12-Months
Ended June 30,
2023
|
12-Months
Ended June 30,
2022
|
Net income (loss) for
the period
|
(2,504)
|
(22,537)
|
(7,912)
|
(8,823)
|
Interest
expense
|
1,264
|
1,126
|
6,236
|
4,770
|
Amortization of
intangible assets
|
62
|
66
|
248
|
263
|
Income tax
(recovery)
|
(1,337)
|
(345)
|
(865)
|
5,906
|
Share of net (income)
loss in
investment in associates
|
687
|
577
|
1,339
|
802
|
Depreciation and
amortization
|
1,614
|
1,658
|
6,413
|
6,960
|
Gain (loss) on
property, plant and
equipment
|
12
|
(3,725)
|
(1,218)
|
(3,744)
|
Legal settlement
reserve
|
3,000
|
-
|
3,000
|
-
|
Crush plant
impairment
|
-
|
25,904
|
-
|
25,904
|
Adjusted
EBITDA
|
2,798
|
2,724
|
7,241
|
32,038
|
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
June 30, 2023
|
3-Months Ended
June 30, 2022
|
12-Months
Ended June 30,
2023
|
12-Months
Ended June 30,
2022
|
Net income (loss) for
the period
|
(2,504)
|
(22,537)
|
(7,912)
|
(8,823)
|
Crush plant
impairment
|
-
|
25,904
|
-
|
25,904
|
Executive severance
and
employee cost reduction
|
220
|
-
|
2,574
|
-
|
Regulatory
investigations - legal
related costs
|
745
|
1,661
|
5,165
|
4,743
|
Legal settlement
reserve
|
3,000
|
-
|
3,000
|
-
|
Adjusted net
income
|
1,461
|
5,028
|
2,827
|
21,824
|
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, investigations of the CFTC and the DOJ into the
Corporation's oat trading activities, 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 June 30,
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, regulations and policies and the interpretations
thereof, 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.