United Grain Growers has recorded its best second quarter ever.
The Winnipeg-based grain company last week reported net income of $8.3 million, or 48 cents per share, and cash flow from operations of $11 million for the three month period ending Jan. 31. Both are records for the quarter.
“We have noted in previous reports that UGG’s business momentum has been building,” chief executive officer Brian Hayward said in a News release
news. “We’re now showing the bottom line evidence of that.”
During the same quarter last year, the company recorded a net loss of $281,000 and cash flow of $5.7 million.
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Six months into the fiscal year, the company has recorded net earnings of $3.1 million (15 cents per share) on sales of $811.6 million.
Earnings before interest, taxes, depreciation and amortization, considered a key measure of corporate performance, totaled $17.7 million for the quarter and $21.3 million for the year to date, up from $11.6 million in the first six months a year earlier.
Capital expenditures during the quarter were $4.5 million, down sharply from $16.8 million a year ago.
Earnings prospects for the remainder of this year will depend largely on the level of crop input sales and grain shipping volumes, the company said.
“Nevertheless, UGG’s management team remains optimistic that results for 2001 fiscal year will represent a significant recovery from last fiscal year,” it said. In 1999-2000 the company recorded a profit of $2.2 million.
The second quarter was marked by strong results in the company’s crop production services division, which showed a gross profit of $17.9 million and operating income of $4.3 million, up from $3 million in the same quarter last year.
Farmers have been purchasing farm supplies earlier than usual this year in order to avoid expected price increases in fertilizer.
For the first six months of the year the division recorded a net loss of $1.4 million, improved from a loss of $5.3 million a year ago.
Second quarter grain volumes were slightly higher this year at both country and terminal elevators. The company’s grain handling business produced operating income for the quarter of $9.1 million, compared with $2.2 million a year ago, pushing the six-month operating income to a three-year high of $13.4 million.
Earnings in the livestock division showed strength, with feed volumes up 11 percent. Gross profits for the quarter increased by about 13 percent to $8.8 million, with operating income u-10-p 43 percent to $4.3 million.
