Economic turmoil around the world is having a negative impact on the bottom lines of two publicly traded Canadian pulse crop companies.
Legumex Walker Inc. reported a net loss of $2.4 million in its first quarter of operations.
“This uncertainty is definitely impacting our results in the near-term,” said chief financial officer Anthony Kulbacki.
He said the recently formed company would have made a small profit if it wasn’t for one-time charges associated with merging Roy Legumex Group of Companies and Walker Seeds Ltd.
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Alliance Grain Traders Inc. posted net earnings of $10.5 million for the third quarter of 2011.
Company president Murad Al- Katib said pulse buyers are starting to restock their empty cupboards but not as fast as he would like.
“There remains a sense that global demand is materializing perhaps slower than expected, in part due to global economic uncertainty,” he said.
Legumex Walker reported sales of $41.4 million and earnings before interest, taxes, depreciations and amortization (EBITDA) of $1.9 million for the quarter.
It said construction of its canola processing plant in Warden, Washington, is on budget and on schedule to open in early 2013.
Alliance posted sales of $190.6 million and adjusted EBITDA of $15.03 million for the quarter, up from sales of $169.9 million and adjusted EBITDA of $9.2 million in the previous quarter.
“With ample crop supply and recent reported increase of exports from many origins, we believe the outlook is positive through to the end of this year and into the 2012 year,” said Al-Katib.
Both firms are poised for further expansion. Legumex Walker has $38.6 million of cash on hand and $30.25 million available in its operating lines of credit.
“We’re very excited about bringing additional companies into the Legumex Walker family of companies and we’ll be actively working on that and hope to see something happen in 2012,” said president Joel Horn.
Alliance has $17.3 million of cash on hand and $60 million in unused operating lines of credit.
Al-Katib said the company is well positioned for continued growth and diversification with a specific focus on value-added operations that will create food ingredients and packaged consumer products.
Alliance would also like to expand its operations into India, setting up distribution facilities in that all-important pulse market.
