MINNEAPOLIS, Nov. 8, 2022
/CNW/ - Ceres Global Ag Corp. (TSX: CRP) ("Ceres" or
the "Corporation") today announced its financial and
operating results for the quarter ended September 30, 2022. All amounts are in U.S.
dollars unless otherwise noted.
Highlights for the quarter ended September 30, 2022
(Comparisons to the
quarter ended September 30, 2021)
- On August 23, 2022, Robert Day stepped down as President and Chief
Executive Officer of the Corporation. Carlos Paz, VP and Commercial Director, was
appointed as Mr. Day's replacement
- First quarter revenues in increased by 25% compared to the same
period in 2021;
- Adjusted Net Income for the quarter was $337 thousand;
- First quarter gross profit down from the previous year, which
was the most profitable quarter in the history of Ceres;
- Income from operations and net income were both down, due to
volatile market conditions and cost reduction measures related to
employee severance;
- On October 1, 2022, Mr.
Thomas Coyle was appointed to the
Board of Directors. In addition to his role as Independent
Director, Mr. Coyle will lead the Board's oversight of Ceres' risk
management and futures compliance.
CEO Commentary
"Despite a late harvest and subsequently lower volumes during
the quarter, we were able to achieve positive adjusted net income
while also maintaining strong top line revenue growth,"
Carlos Paz, President and CEO of
Ceres commented. "In addition to the late harvest, this quarter was
colored by challenging market conditions, due to the ongoing
conflict in Ukraine. Despite
challenging planting conditions, we saw resilience in our northern
tier crops in Canada and the U.S.
which produced adequate crops and resulted in more product to
handle, merchandise and supply to our end customers."
Summary Financial and Operational Results
(in thousands of
USD
except per share amounts)
|
3-Months Ended
September 30, 2022
|
3-Months Ended
September 30, 2021
|
Revenue
|
260,113
|
208,371
|
Gross profit
|
5,565
|
23,859
|
Income from
operations
|
(2,179)
|
13,659
|
Net income
(loss)
|
(3,588)
|
8,769
|
Earnings (loss) per
basic
share
|
(0.12)
|
0.28
|
Adjusted net
income2
|
337
|
9,760
|
EBITDA1
|
(218)
|
15,401
|
|
1, 2. See the
Non-IFRS Financial Measures and
Reconciliations section
|
Outlook
Mr. Paz added, "Looking ahead, we expect farmer sales and
handled volumes to increase during Q2 and through the remainder of
the year as we continue to work with our diverse network of
partners to access growers and core products. We have continued to
maximize the full potential of our assets by leveraging our robust
infrastructure to increase volumes and efficiencies across all
products."
"While market conditions are likely to remain volatile under the
current geopolitical environment, we have the resources and talent
to adapt to these challenges," Mr. Paz continued. "We will continue
to deliver superior value to our customers by maximizing trading
and merchandizing opportunities and organically developing
regenerative agriculture and supply chain solutions."
Conference Call Details
Management of Ceres will host a conference call today,
November 8, 2022, at 09:00 a.m. ET. All interested parties can join
the conference call by dialing 1-888-204-4368 or 1-647-794-4605.
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/7a3zLa3owRE. 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.
EBITDA (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 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 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. See the table below for the reconciliation of
EBITDA.
(in thousands of
USD)
|
3-Months Ended
September 30, 2022
|
3-Months Ended
September 30, 2021
|
Net income (loss) for
the period
|
(3,588)
|
8,769
|
Interest
expense
|
1,368
|
1,124
|
Amortization of
intangible assets
|
62
|
66
|
Income tax
(recovery)
|
178
|
3,592
|
Share of net (income)
loss in investment in
associates
|
103
|
101
|
Depreciation and
amortization
|
1,659
|
1,766
|
Gain (loss) on
property, plant and equipment
|
-
|
(17)
|
EBITDA
|
(218)
|
15,401
|
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 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, 2022
|
3-Months Ended
September 30, 2021
|
Net income (loss) for
the period
|
(3,588)
|
8,769
|
Executive severance and
employee cost reduction
|
2,076
|
-
|
Regulatory
investigations - legal related costs
|
1,849
|
991
|
Adjusted net
income
|
337
|
9,760
|
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 12 locations across Saskatchewan, Manitoba, Ontario, and Minnesota. These facilities have an aggregate
grain and oilseed storage capacity of approximately 31 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, 2022. 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.