Agricore United has reported a second quarter net loss of $22.1 million, or 51 cents a share, on revenue of $717 million.
That’s twice as bad as last year, when the company’s second quarter produced a loss of $11.2 million, or 25 cents per share, on sales and revenue of $881 million.
Earnings before interest, taxes, depreciation and amortization, considered a key measure of a company’s performance, produced a loss of $2.3 million.
With half the 2002-03 fiscal year now under its belt, AU is carrying a net loss of $41.7 million, compared with $22.9 million at the same time last year.
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But, chief executive officer Brian Hayward had mainly positive things to say as he announced the financial results for the three months ending April 30.
“The outlook for the balance of 2002-03 and into 2003-04 is cause for cautious but increasing optimism,” he told reporters and grain industry analysts during a June 11 conference call.
“There is cause for optimism in the western Canadian grain sector and for our customers that the worst is behind us and the light at the end of the tunnel is beginning to materialize.”
Hayward said the top indicator of recovery, both for the industry and for AU, is strong sales of farm inputs.
Sales of crop inputs in the quarter were $94.3 million, up 80 percent from the same period a year ago, providing a gross profit of $27 million and EBITDA of $1.9 million.
That trend continued in May, with input sales up $90 million from last year. The May to July quarter traditionally accounts for about 75 percent of AU’s crop input sales.
“We’re very, very optimistic about the rest of the farm supply season,” said Hayward, adding that increased use of crop inputs combined with good weather could produce a big crop this year. That would mean more volume and greater earnings for the company.
While the increase in crop input sales, along with steady margins and continued reduction in expenses, constituted some good news for the quarter, the bottom line was ultimately determined by continued low grain volumes resulting from last year’s drought.
Grain shipments from AU’s country elevators during the quarter totalled 1.53 million tonnes, compared with 2.07 million a year earlier. The six-month total is 3.01 million, down from 5.03 million.
At the company’s terminals, volumes dipped to 531,000 tonnes during the quarter, compared with one million tonnes a year earlier.
Sales and revenue from grain handling operations was $558.4 million, down from $766.3 million a year ago, while gross profits dropped by $21 million to $26.6 million.
Grain handling margins declined slightly to $21.45 per tonne as companies competed intensely for the grain available, but that was offset by increased market share, with AU handling 40 percent of total industry grain shipments, up from 35 percent in the first three months of the fiscal year.
Hayward added that the larger quarterly loss this year can be partly attributed to the fact that a year ago the company realized a one-time gain of $10.6 million from the sale of certain assets.
