Agriliance LLC reported a pretax loss of $8.1 million on sales of $633.6 million for the third quarter ending Sept. 30, 2006, according to co-owner Land O’Lakes Inc., in recent filings with the Securities Exchange Commission. This compares to a year-ago loss of $6.5 million on sales of $669.3 million.
LOL said Agriliance’s third-quarter fertilizer volumes were off 12 percent from the year-ago period, and pretax earnings decreased $3.3 million in that sector. Pretax earnings from Agriliance’s Southern retail business were $3.9 million lower than last year due to higher interest costs, competitive margin pressures, and devaluation for herbicide. Pretax earnings from its Northern retail business increased $2.6 million, primarily due to an increase in rebate income. Pretax earnings from the crop protection sector increased $3.1 million, primarily due to program timing.
Agriliance’s nine-month net earnings were off almost $30 million in the current year at $56.6 million on sales of $3.04 billion, versus the year-ago $86.2 million and $3.13 billion, respectively. YTD fertilizer volumes were off 15 percent and pretax earnings decreased $21 million, primarily due to lower margins because of the effect of falling energy prices on amounts realized for inventory and higher interest costs. Despite higher sales and margins, Southern retail pretax earnings were $1.6 million lower than last year due to increased interest costs. Northern retail pretax earnings were up $1.9 million, primarily due to an increase in rebate income. YTD crop protection sales decreased 3 percent due to continued valuation related to products losing patent protection, while pretax earnings increased $7.6 million due to an increase in rebate income and timing of sales programs.
LOL received $28.9 million in dividends from Agriliance for the year ending Dec. 31, 2005. Any dividends from Agriliance for 2006 are expected to be paid in the fourth quarter 2006 or first quarter 2007.
Industry sources were quick to speculate last week that changes in the Agriliance crop nutrient sales team (see page 10) likely correlated with the joint venture’s financial results.