MINNEAPOLIS, MN, Nov. 9, 2023
/CNW/ - Ceres Global Ag Corp. (TSX: CRP) ("Ceres" or the
"Corporation") today announced its financial and operating
results for the three-month period ended September 30, 2023. All amounts are in U.S.
dollars unless otherwise noted.
Highlights for the quarter ended September 30, 2023
(Comparisons to
the quarter ended September 30,
2022)
- Gross profit for the quarter was $14.2
million, the second-best first quarter in the Corporation's
history, up from $5.6 million in the
previous year.
- Income from operations was $9.0
million, an increase of $11.2
million compared to the prior year.
- Net income for the quarter was $6.2
million, up $9.8 million
compared to the previous year.
- The Corporation handled and traded 29.9 million bushels, up
7.2% from 27.9 million bushels in the previous year.
- On October 23, 2023, the
Corporation resolved the investigation by the Commodity Futures
Trading Commission and does not anticipate any other charges or
fines from the U.S. Department of Justice or the Commodity Futures
Trading Commission related to these matters.
CEO Commentary
"This quarter, driven by our farmer-direct origination strategy,
methodical early crop development analysis, and our ability to
leverage our asset footprint and network of partners, we
effectively navigated extreme weather conditions and positioned the
business to achieve the second-best first quarter financial results
in the Corporation's history," commented Carlos Paz, President and CEO of Ceres.
"We achieved record-breaking first quarter results in the Seed
Retail and Processing segment, and near-record first quarter
results in all other segments, demonstrating the effectiveness of
our fundamental strategy of optimizing our asset footprint around
core products. Our joint venture at Berthold Farmers Elevator
continues to be a valuable addition to our network, with volumes
increasing 24% this quarter. With the implementation of operational
efficiencies at our Jordan crush
plant and our team's effective trading strategies, our quarterly
soybean crush volumes reached a historic high, enabling us to
achieve record-breaking gross margins in the Seed Retail and
Processing segment this quarter."
Summary Financial and Operational Results
(in thousands of USD
except per share amounts)
|
3-Months Ended
September 30, 2023
|
3-Months Ended
September 30, 2022
|
Revenue
|
216,000
|
260,113
|
Gross profit
|
14,179
|
5,565
|
Income from
operations
|
9,039
|
(2,179)
|
Net income
(loss)
|
6,206
|
(3,588)
|
Earnings (loss) per
basic share
|
0.20
|
(0.12)
|
Adjusted net
income2
|
6,395
|
337
|
Adjusted
EBITDA1
|
10,575
|
(218)
|
1, 2. See the Non-IFRS
Financial Measures and Reconciliations section
|
Outlook
Mr. Paz added, "Geopolitical tensions continue to intensify as
the conflict in the Middle East
has added another layer of uncertainty in markets. While the
effects on markets are relatively muted compared to the
Russia-Ukraine conflict, escalation remains a risk
that could significantly impact our business units. As winter sets
in and activity slows down in the Canadian Prairies and the U.S.
Northern Plains, our team will shift its focus to Mexico and southern United States. Our strength lies in our
ability to closely monitor fundamental drivers and global crop
developments, and we will continue to seize opportunities as they
emerge."
"Building on the momentum from our strong results this quarter,
we remain focused on executing our core strategy of optimizing our
network of partners, finding innovative, cost-effective methods for
increasing direct farmer engagement, effectively trading and
marketing our products, and developing regenerative agriculture and
supply chain solutions for our customers."
Conference Call Details
Management of Ceres will host a conference call today,
November 9, 2023, at 09:00 a.m. ET. All interested parties can
join the conference call by dialing 1-877-870-4263 or
1-855-669-9657. The conference call ID is 10183921. 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/q3X20BOz1p8. 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
September 30, 2023
|
3-Months Ended
September 30, 2022
|
Net income (loss) for
the period
|
6,206
|
(3,588)
|
Interest
expense
|
1,305
|
1,368
|
Amortization of
intangible assets
|
62
|
62
|
Income tax
(recovery)
|
1,943
|
178
|
Share of net (income)
loss in investment in associates
|
(529)
|
103
|
Depreciation and
amortization
|
1,588
|
1,659
|
Adjusted
EBITDA
|
10,575
|
(218)
|
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
September 30, 2023
|
3-Months Ended
September 30, 2022
|
Net income (loss) for
the period
|
6,206
|
(3,588)
|
Executive severance and
employee cost reduction
|
-
|
2,076
|
Regulatory
investigations - legal related costs
|
189
|
1,849
|
Adjusted net
income
|
6,395
|
337
|
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 September 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
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.