AGT second-quarter earnings up

by Arvin Donley
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REGINA, SASKATCHEWAN, CANADA – AGT Food and Ingredients (AGT) on Aug. 10 reported second-quarter adjusted EBITDA of C$25.3 million ($19.4 million) for the three months ended June 30, 2016, an increase of 14% from C$22.2 million for the same period a year ago.

For the trailing 12 months, adjusted EBITDA increased 25% to C$112.9 million from C$90.3 million for the 12 months ended June 30, 2015.

Cash flow from operating activities was C$56.2 million for the second quarter, compared to C$44.2 million in the same quarter a year earlier. That compares to cash used in operating activities of C$11.6 million for the three months ended March 31, 2016.

"We are pleased with these results, especially given the supply constraints that the Canadian pulse sector has faced due to shortages of product from last year's harvest,” said Murad Al-Katib, president and chief executive officer of AGT. “We expect good quantities of pulses from harvest this year, and we already see farmers getting ready to get out into the field and get their pulses and durum wheat into the bins. We expect new crop deliveries to start in a few weeks, and this is a positive for our plant operations and sales programs for the balance of 2016 and into 2017. Production at these volumes will really show the earnings strength of our processing and handling system and the asset base we have built. The record acreage of pulses in North America should translate to a significant quantity of good quality pulses and durum production.”

Adjusted gross profit for Food Ingredients and Packaged Foods was C$197.38 per tonne for the six months ended June 30, 2016, compared to C$189.27 per tonne for the six months ended June 30, 2015. Those two business units represented 13.8% of total tonnes invoiced and 30.9% of adjusted EBITDA for the six months ended June 30, 2016, compared to 17.3% of total tonnes invoiced and 34.6% of adjusted EBITDA for the six months ended June 30, 2015.

"Our business units, particularly our food ingredient business unit, are continuing to advance and mature,” said Huseyin Arslan, chairman of the board of directors of AGT. “We are seeing volume gains and customers are looking positively to our new products from our enhancement production lines, such as deflavoring and our additional milling capabilities. Our expansions in Minot are proceeding well and on-time. These positives are further strengthened by growth in our packaged foods business unit and strong performance for our trading and distribution segment, which demonstrates the benefit that the seasonal diversification we have been working towards has for our business."

AGT declared a dividend of C15¢ per share for the second quarter.

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