Alliance Grain Traders keeps predicting a lentil market recovery is imminent, but it still hasn’t materialized.
Company president Murad Al-Katib reported more disappointing result for the third quarter of 2012.
Demand for AGT’s products is strengthening, but it’s not showing up in the bottom line.
“Pricing pressure and generally lower prices on pulses in end use markets has not led to the margin recovery to the extent that we believed we would see in the period,” he told investment analysts and reporters in a conference call.
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The Regina firm posted sales of $210 million for the quarter, up from $202 million in the previous quarter and $190 million in last year’s third quarter.
Earnings before interest, taxes, depreciation and amortization were $11.5 million, up from $9.3 million the previous quarter but down from $15 million posted a year ago.
“In the more than 15 years I’ve spent in the global export sector, believe me when I say we have never seen conditions like those that we are now emerging from. These conditions are about as bad as they can get,” said Al-Katib.
Last quarter, Al-Katib expected a return to normalized sales and margins in the second half of 2012. His new prediction for recovery is 2013.
“Credit liquidity constraints globally appear to be easing and we are seeing stabilization of currency in many of our key markets,” he said.
The company anticipates that will eventually result in a return to normalized sales and margins. In the meantime, Alliance has adopted a strategic plan that includes a continued focus on cost cutting and ex-panding the scope of its business.
AGT hopes to boost margins through value adding.
Alliance will examine opportunities to process cereals, soybeans and other oilseeds at its Canadian pulse processing plants to increase use of those facilities.
