Fertilizer sales were up 80.7 percent for the third quarter ending April 30, 2007, at Saskatchewan Wheat Pool Inc.’s Agri-Products division – $52.4 million versus the year-ago $29.0 million. SaskPool cited higher selling prices and increased volumes.
SaskPool said that potential fertilizer shortages in Western Canada this spring caused farmers to take delivery of fertilizer supplies early. The same was true of canola seed and crop protection products, including gyphosate and preseed products. Moving into spring, fertilizer prices were near record highs, said SaskPool, which noted that estimated seeded acreage illustrates a shift from spring wheat to canola, barley, and oats, with the acreage of these three going up 1 million acres each. Canola acreage is expected to increase 1.6 million acres to 14.8 million acres, up 12.1 percent over last year’s 13.2 million acres. The previous record was 14.2 million acres in fiscal 1995. This is a particular boost for the company, as canola requires more inputs than cereal crops, noted SaskPool.
Ag-Products also saw a 50.3 percent boost in crop protection sales, to $11.4 million, up from $7.6 million. YTD was up 30.1 percent, to $22.5 million from $17.3 million.
The Ag-Products division reported total sales of $93.4 million versus the year-ago $56.3 million. Sales in SaskPool’s retail operations rose 67 percent, and the WCFL fertilizer production segment rose 62 percent. Third-quarter segment EBITDA was $9.8 million, versus nil during the year-ago period. Nine-month net sales were up 11.5 percent, to $222.4 million versus the year-ago $199.5 million. Nine-month EBITDA was $6.0 million versus a year-ago loss of $4.8 million.
SaskPool-wide, third-quarter net income was $9.2 million (EBITDA $24.6 million) on sales of $402.3 million, versus the year-ago loss of $8.3 million ($17.5 million EBITDA) and $336.5 million. For the nine-month period, SaskPool had net earnings of $12.0 million (EBITDA $48.7 million) on sales of $1.2 billion, versus the year-ago loss of $13.0 million (EDITDA $28.6 million) and $978.2 million.
In other news, Agricore United’s shareholders have approved the continuance of AU under the Canada Business Corporations Act (CBCA) and the plan of arrangement pursuant to which SaskPool will acquire all of the outstanding limited voting common shares of AU, and AU will redeem all of the outstanding Series A convertible preferred shares not tendered to SaskPool’s offers, which expired on June 12, 2007.
For an interim period, AU will become a wholly-owned subsidiary of SaskPool and will be delisted from TSX. Also, SaskPool’s president and CEO, Mayo Schmidt, will take on the same titles at AU, with the SaskPool board replacing the former AU board. The two companies will eventually be consolidated.
In addition to its grain and food processing businesses, the merged company will operate 276 agri-product sites, from Manitoba to the Peace River District in B.C. As previously reported, during the process of the purchase of AU, SaskPool agreed to sell certain grain and agri-product assets, including input outlets, to James Richardson International and Cargill Inc. (GM May 14, p. 1, April 2, p. 1).