Legumex Walker Inc.’s third quarter results were just as disappointing as those posted a week earlier by its competitor, Alliance Grain Traders.
Both pulse processers have been hit hard by falling pea and lentil sales.
“Despite a strong performance in our bean business and growth from our acquisitions in the U.S. and expansion in China, we experienced a slowdown in sales for certain of our commodities, especially lentils and peas, which dampened our Q3 results,” Legumex president Joel Horn told investment analysts in a conference call.
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Revenues for the quarter were $56.5 million, up from $41.4 million for the same quarter a year ago, although the quarter was only 79 days because the company began operations on July 14., 2011.
Sales were bolstered by strong bean shipments from the company’s plants in Manitoba and Minnesota. Beans are a high-value product, which helped mask the poor performance of the company’s Canadian pea and lentil processing facilities.
Earnings before interest, depreciation and amortization for the quarter was a loss of $2 million compared to EBITDA of $1.9 million for the 79-day period a year ago.
One analyst noted Canada’s pea and lentil exports were good for the quarter. Horn said shipments were driven to places where Legumex has a lower market share and a lot of product went out in bulk while the company usually ships containers.
Sales were also hurt by reports of a good Canadian pulse harvest.
“Buyers of certain products postponed purchases based on the expectation of a larger and less expensive new crop,” said Horn.
“We also passed on some low margin business due to heightened credit risk.”
Horn is confident the third quarter results were an anomaly. He sees normal sales in the fourth quarter.
