Construction of a $50 million pasta plant in Regina, which was announced with prime minister Stephen Harper in attendance last fall, has been delayed until next year.
Alliance Grain Traders Inc. said lower first quarter earnings year over year and customer hesitation affected business in the three months ending March 31.
President Murad Al-Katib said he is optimistic that global food markets will soon return to normal.
“Importer hesitation brought on by decreased credit liquidity and currency devaluations, which has affected export demand, is beginning to turn around, which is good news for us,” he said. “Consumption has remained strong for our products and we expect that importers will need to refill their depleted local market stocks in the near term.”
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However, capital expenditures have been put on hold, including the pasta plant. It is to be a wheat and durum processing facility and pasta plant, located in the Global Transportation Hub just west of Regina.
It was expected to open next year, but now construction won’t start until then. Al-Katib said the company is monitoring developments in the grain industry.
“Pending developments, such as the de-monopolization of the Canadian Wheat Board and the proposed sale of Viterra to Glencore, as well as the free trade negotiations between Canada and the EU, will continue to reshape the landscape of the industry,” he said. “Accordingly, management believes it is prudent to focus on our balance sheet at this time and improve our business metrics.”
First quarter results showed earnings before interest, taxes, depreciation and amortization at $6.1 million, down from $14.2 million for first quarter 2011.
Net earnings were $2.8 million or 14 cents per share, down from $7.2 million or 36 cents per share, year over year.
