Construction of a new grain terminal at Northgate, Sask., is complete, say officials with the terminal’s parent company, Ceres Global Ag.
Grain volumes moving through the facility are expected to increase significantly in the new crop year.
Ceres’ chief executive officer Patrick Bracken told a May 12 conference call with investors that construction of the facility was completed on budget and ahead of schedule.
The terminal loaded 774 rail cars in the three-month period ending March 31, 2016 and close to 1,450 cars for the 2016 fiscal year.
Bracken projected that car loadings at the facility should soon increase to four 110-car unit trains a month, which will total grain carloads to 450 per month.
“As we look forward to harvest, we’ve based our model on one train a week, and we feel pretty optimistic that we can make that,” he said.
The Northgate grain terminal and logistics hub, which is in southeastern Saskatchewan near the U.S. border, figured prominently in Ceres’ fourth quarter financial report.
In addition to grain, the company transloaded more than 600 rail cars of propane between April 1, 2015, and March 31, 2016.
Plans are also in place to build a $13 million bulk fertilizer facility at Northgate, with completion of that component scheduled for May 2017.
Ceres signed an agreement with fertilizer distributor Koch Fertilizer Canada late last year.
The agreement will give Koch exclusive use of the fertilizer facility for at least five years and will guarantee a full return of Ceres’ capital investment by virtue of minimum fertilizer volumes or “hurdle rates.”
Bracken said Northgate’s fertilizer component will drive more deliveries to the Northgate grain terminal by giving local growers an opportunity to back-haul fertilizer.
Ceres generated fourth quarter revenues of $119 million, up from $55 million a year earlier.
Full-year revenues were listed at $356 million in fiscal 2016, up from $193 million in 2015.
Fourth quarter net income was listed at $1.2 million, or four cents per share compared to a net loss of $3.5 million, or 14 cents a share, a year earlier.
Net losses for the 12-month period ending March 31, 2016, were $13.9 million compared to a net loss of $1.4 million in 2015.
Financial results for 2016 were affected by an $11.7 million loss on durum inventories as well as one-time costs associated with construction activities at Northgate.
Bracken said improved financial results from the fourth quarter of 2016 indicate that the company’s plan to generate more revenue from Northgate is gaining traction.
He said the recently completed terminal will result in higher grain volumes and increased use of the logistics hub.
That, combined with the closure of three older and less efficient grain handling facilities in Ceres’ American elevator network, will reflect positively on the company’s bottom line.
Access to international markets is also improving.
An agreement with a partner in the U.S. Pacific Northwest has allowed the company to ship canola from Northgate through export terminals en route to Japan.
“That’s working very well,” Bracken said.
“Canola is really going smoothly.”
Ceres, a Canadian-based company, is the sole owner of Riverland Ag Corp., a grain collection and storage enterprise that includes more than 35 facilities in Canada and the United States.
Ceres also owns a 25 percent stake in Stewart Southern Railway, a short-line rail company in southern Saskatchewan.