The Prairies’ best known independent, farmer-owned grain company has posted some pretty good financial results in a year that hasn’t been kind to the industry.
Weyburn Inland Terminals Ltd. last week reported after-tax earnings of $1.69 million on gross revenue and sales of $72.3 million, for the year ending Dec. 31, 1999.
That’s down about nine percent from the previous year’s $1.87 million earning on gross revenue of $76 million, and represents the lowest profit in four years.
But company officials weren’t about to complain, describing the result as a “significant accomplishment” given the challenges faced and the problems experienced by other grain handling companies.
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“We’re not happy that profits are down, but we’re happy that they’re not down any more,” said WIT president Claude Carles.
The 23-year-old terminal company shipped 374,000 tonnes of grain during the year, slightly more than the previous year. The record volume is 518,000 tonnes, shipped in 1997.
Pre-tax earnings in 1999 were $3.18 million, down from $3.43 million.
WIT ended the year with working capital of $2.69 million, compared with $1.69 million a year earlier.
A record $652,000 in dividends was paid to shareholders and the company entered 2000 virtually debt free.
Carles said the secret to the company’s success is to do what it does best and to keep its customers happy.
“We do a good job of shipping grain and we don’t want to forget that. And we focus very strongly on service for farmers and maintaining a strong customer base.”
He said the company also benefits from loyalty based on community ties and the fact it’s locally run.
The company hasn’t stood still in recent years, getting into the farm input business by selling farm chemicals and fertilizer, building a pelleting mill, and buying a special crop processing plant.
“Our philosophy is to expand slowly, do a good job at what you’re doing and go from there,” said Carles.
Learn from experience
The company has been through some tough times and learned its lessons, he said.
“We were on the brink of shutting the doors a couple of times, and you learn from those things, plan accordingly and try to keep your head above water.”
Last year was eventful for WIT and its 1,300 shareholders.
A group of unhappy shareholders that wanted the right to sell its shares to the highest bidder tried unsuccessfully to take over the board of directors at the annual meeting.
The new board then adopted what it called its Common Sense Plan to deal with concerns about the liquidity of WIT shares.
Under a dividend reinvestment plan unveiled in December, shareholders can choose to have their dividends automatically transformed into common shares in the company. So far about 20 percent of shareholders have registered, although Carles expects that will increase as people become more familiar with the program.
The company also announced last week that as a result of an issuer bid initiated Feb. 4, it is buying back 105,258 common shares offered for sale by shareholders at the previously announced price of $21.25 per share. That represents about 43 percent of the total shares tendered. Payments were to be sent out by March 13.
The issuer bid was designed to give shareholders an opportunity to sell. The shares are annulled after being purchased, reducing the total number of shares and thereby increasing the value of remaining shares.
Carles said the fact that 77 percent of shares were not offered for sale indicates most shareholders have confidence in the terminal and its business plan.
In August, the terminal signed a grain handling agreement with United Grain Growers, after shareholders rejected a proposal for a strategic alliance that would have seen UGG assume an ownership stake.
