Viterra Inc. reported record results for the fiscal year ending Oct. 31, 2011, and the performance of its Agri-products segment, and the fertilizer business within it, were key. Agri-product EBITDA was up 59 percent, to C$244.1 million on sales and other operating revenues of $2.38 billion, compared to the year-ago $153.8 million on sales/revenues of $1.8 billion.
Fertilizer sales were up 41.6 percent, to $1.12 billion from the prior year’s $791.1 million. Volumes were up 11 percent, to 1.94 million mt from 1.75 million mt, while the average fertilizer margin per mt went up to $133.53/mt from the prior year’s $97.36/mt. Crop input and seed sales were $388.2 million and $237.4 million, respectively, up from the year-ago $384.2 million and $207.4 million.
Company-wide, Viterra net earnings for the year were up 83 percent, to $265.4 million ($.71 per share) on sales of $11.8 billion, up from the prior year’s $145.3 million ($.39 per share) on sales of $8.26 billion. EBITDA moved up 36 percent, to $701.9 million from the year-ago $517.6 million. President, CEO, and Chairman Mayo Schmidt told analysts Jan. 19 that the company’s Southern Australia assets contributed over one-third of EBITDA, and that the business there has been fully integrated and achieved targeted synergies six months ahead of schedule. He said the Australian Agri-products business is modest to-date, only about 5 percent of market share; however, he believes it can grow organically by using techniques from its Canadian model and also by adding input distribution centers to existing grain handling facilities. He noted that Viterra is a market leader in Agri-products retail in Western Canada with a more than 35 percent market share, and offers growers a wide variety of products – most recently fuel oil.
Viterra announced Jan. 18 that its board has approved a 50 percent increase in its dividend rate, to $.15 per share per year compared to the previous rate of $.10 per share. The first semi-annual dividend under the new rate ($.075 cents) will be payable Feb. 22, 2012, to shareholders of record Jan. 30, 2012.
Revenues in the Agri-product division also increased in the fourth quarter due to favorable weather in Western Canada that resulted in a successful fall fertilizer application season. Fourth-quarter Agri-product EBITDA was $51.9 million on sales of $519 million, up from the year-ago $30 million and $325.1 million, respectively. Fertilizer sales were up 58 percent, to $258.5 million from the year-ago $163.5 million. Fertilizer volumes were up 11 percent, to 411,000 mt from the year-ago 370,000 mt, while the fertilizer margin per mt sold was $159.78/mt, up from $110.02/mt. Crop input sales were up slightly to $47.5 million from the year-ago $45.4 million, while seed sales were $4.35 million, up from $1.5 million.
Viterra said the harvest in Western Canada was essentially complete by the end of October. It estimates a 10 percent increase in the harvest of the top six grains, to 49.3 million mt from the year-ago 45 million mt.
Company-wide, Viterra did see a drop in fourth-quarter net earnings, and cites special factors. Net earnings were $9.5 million ($.03 per share) on sales of $3.1 billion, compared to the year-ago $52.7 million ($.14 per share) and sales of $1.95 billion. EBITDA was down at $70.2 million from the year-ago $88 million. The company recorded an $8 million goodwill impairment on Western Canada feed operations, reflecting the continued intense competition and overcapacity in the feed market. Asset disposal losses totaled $1 million, compared to a year-ago gain of $7 million when the company sold one of its North American grain facilities. The effective tax rate for the quarter was 36 percent, compared to the year-ago 18 percent.
Viterra expects the Agri-products segment to remain strong in fiscal 2012, citing historically high grain prices