A big drop in grain volumes and farm input sales caused a big drop in earnings for Weyburn Inland Terminal in 2004.
The company has reported pre-tax earnings of $2.97 million in the fiscal year ended Dec. 31, 2004, on grain volumes of 315,000 tonnes, and farm input sales of $15.5 million.
The previous year, pre-tax earnings were $4.23 million on grain volumes of 407,000 tonnes and farm input sales of $19 million.
After-tax earnings of $3.9 million were actually higher by $900,000, thanks to a favourable resolution to a dispute involving the tax status of manufacturing assets owned by the company.
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“The grain business continues to be difficult for the whole industry, including WIT and our customers,” said chief executive officer Rob Davies.
In the first half of the year the company had to deal with the drought-reduced, high quality 2003 crop, while in the fall it struggled with the weather-damaged, low quality 2004 crop.
He said the company’s diversification efforts of recent years, including farm input sales and feed pelleting operations, have stood it in good stead during the past couple of years, by reducing dependence on grain handling volumes. The lack of any long-term debt has also been a positive factor.
Nevertheless, grain handling remains crucial, and weather will always have a significant impact on farmer-customers and the company’s financial well-being.
WIT’s board of directors approved a record semi-annual dividend of $1 per common share, with preferred shareholders receiving $1.60 per share. The dividend will be paid by April 4 to shareholders of record on March 23. The semi-annual dividend paid on common shares last year was 55 cents, with the annual dividend totalling $1.10.
Company president Claude Carles noted that most shareholders are also customers.
“This record semi-annual dividend payout of approximately $961,000 is a way to pay them back for their continuing support through these difficult times in agriculture,” he said.
The company’s working capital at the end of the year was $10.3 million, an increase of $5.3 million from a year earlier, despite dividend payments of $1.1 million in 2004.
Shareholder equity at year-end was $25.2 million, up by $2.8 million.
Davies declined to say what the company has budgeted for 2005, other than to say it expects to turn a profit, barring yet another weather-related catastrophe.
