Viterra reports $41.2 M in 1Q net income; input prepay at $276.9 M as of Jan. 31

Viterra reported net earnings of C$41.2 million ($.20 per share) on sales of $1.3 billion for the first quarter ending Jan. 31, 2008, versus the year-ago $7.9 million ($.09 per share) and $447.6 million. “As we mark the beginning of our first fiscal year as a combined company (Saskatchewan Wheat Pool and Agricore United), we’ve been able to optimize the returns available in today’s robust commodity markets and deliver strong results this quarter,” said Mayo Schmidt, Viterra president and CEO. “It is a time of optimism in our industry. With our expanded asset base and the expertise of our people, we are preparing for the coming spring selling season with anticipation. We are well positioned to help our farm customers reap the benefits of these market conditions through superior product offerings, strategic marketing opportunities and quality agronomic services.”

The Agri-Product segment, which includes input sales, saw gross margins up at $47.1 million on sales of $165.9 million, versus the year-ago $12.3 million and $80 million, respectively. Viterra said that higher sales in the sector were attributable to stronger fertilizer sales, which benefited from higher selling prices as world supply and demand drove continued price increases. Fertilizer volumes for the quarter were also unusually high as farmers, buoyed by strong cash flows associated with improved commodity markets, were in a position to purchase product earlier in the year to mitigate the risk of higher prices in spring. Higher volumes for the quarter are expected to be offset by lower sales volumes in the spring. As a result, Viterra expects overall volumes for the year to be flat. However, overall sales values are expected to be higher due to stronger selling prices.

Fertilizer sales were $155.4 million for the quarter, up from the year-ago $71.7 million.

Viterra said higher equipment sales were posted due to increased purchases of on-farm fertilizer bins to manage storage. Strong fall fertilizer applications also resulted in additional service income.

Producer prepayments for spring agri-products were $276.9 million as of Jan. 31, 2008, compared to $55.7 million at the same time last year.

While seed sales were down for the quarter, Viterra explained that during the year-ago period there was a big rush to buy canola seeds. However, now all crop commodities are seeing higher prices, so farmers are being more flexible regarding their crop mix.

Viterra said more than 75 percent of the Agri-Products annual sales occur between mid-April and the end of June. With the acquisition of AU, Viterra expanded its retail facility network from 100 to 276 facilities and acquired an additional 57 percent ownership in Westco, becoming the sole owner of this fertilizer wholesaler and manufacturer.

* Includes retail and Westco