Viterra's annual net earnings increase 28%

by World Grain Staff
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CALGARY, ALBERTA, CANADA — Viterra Inc. announced on Jan. 19 that its net earnings for the year were up 28% to C$145 million compared to C$113 million in 2009. Earnings per share were C39¢ compared to C45¢ in 2009 as the weighted average number of shares increased by 120 million shares year-over-year.

Viterra generated EBITDA of C$518 million in 2010 compared to C$324 million in fiscal 2009. The increase was driven by Viterra Australia's operations which were acquired in September 2009 and contributed $176 million in fiscal 2010. Strong fourth quarter fertilizer sales and contributions from new pasta and oat processing businesses also increased EBITDA.

For the year ended Oct. 31, 2010, Viterra's consolidated sales and other operating revenues reached C$8.3 billion, increasing C$1.6 billion or 24% from fiscal 2009. The increase was mainly attributable to Viterra Australia's operations that contributed C$2.3 billion to revenues in fiscal 2010 and to new food processing contributions. Lower volumes and commodity prices in the company's North American grain handling operations partially offset this increase.

The company generated cash flow provided by operations in fiscal 2010 of C$361 million or C97¢ per share up from C$223 million or C89¢ per share in fiscal 2009. Free cash flow was C$239 million compared to C$139 million in fiscal 2009.

"Agriculture continues to be at the forefront of the global economy," said Mayo Schmidt, Viterra's president and chief executive officer. "Recently, flooding in parts of Australia, droughts in Argentina and potential crop damaging frost in Europe has tightened supply and pushed commodity prices up, allowing them to return from the soft pricing environment experienced during the last two years. Viterra is ideally situated with a strong leadership position in origination from both North America and South Australia. In fact, South Australia is currently harvesting what is expected to be a record setting crop.

The company also successfully integrated three major acquisitions during fiscal 2010 thanks to the efforts of our employees. Looking forward, Viterra is focused on delivering more value to shareholders through these acquisitions, its existing asset base, and other opportunities that present themselves in the marketplace in fiscal 2011."

Viterra's total debt-to-capital ratio at Oct. 31, 2010 remained strong at 21%. At year end, Viterra had C$155 million in cash and cash equivalents and cash drawings of C$52 million on its C$1.6 billion Global Credit Facility.

The company generated strong fourth quarter results with EBITDA of C$138 million and net earnings of C$53 million. This is a significant increase over the prior year when EBITDA and net earnings were C$40 million and a loss of C$1 million, respectively. A full quarter of operations from Viterra Australia, strong fertilizer sales and new contributions from the pasta and oat processing businesses drove these increases.

"We are very pleased with our acquisitions of Dakota Growers and 21st Century," said Schmidt. "These new pasta and oat processing businesses are highly accretive and provide Viterra with stable predictable earnings, which we expect to generate higher returns for shareholders."
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