MINNEAPOLIS, MINNESOTA, U.S. — Ceres Global Ag sustained a loss of $5.159 million in the second quarter of 2019 ended Dec. 31, 2018. Revenue for the quarter was $122.82 million, up 37% from $89.56 million compared to the same period a year ago.
“The second quarter was important for Ceres as we were able to put the long-standing Scoular lawsuit behind us and accelerate efforts around growth-based initiatives that had been on hold pending resolution of the lawsuit,” said Robert W. Day, Ceres Global Ag, president, director and chief executive officer. “We made significant progress around growth both in core grain business and the supply chain services business, and we are pushing to execute on several exciting opportunities.”
During a Feb. 13 conference call with analysts, Day said overall financial results for the quarter were “quite negative,” but added that “most of it was related to noncash and onetime events and is not a good reflection of the way the underlying business performed.”
Day listed three large noncash items that affected the second-quarter results:
· Acquisition of Nature’s Organic Grist in June
· A two-third write down of the company’s investment in Caterra Sees Holdings; and
· Appreciation of stock options due to the increase in Ceres’ stock price during the quarter
Storage and transloading revenue for the quarter decreased to $2 million from $2.8 million during the same period last year.
“This reduction in revenue was due to our reduced ownership position in Savage Riverport, with the formation of the joint venture with Consolidated Grain and Barge in the fourth quarter of last year,” said Kyle Egbert, vice-president and chief financial officer. “This also had corresponding impact on our operation and depreciation expense, which also decreased during the quarter to $2.7 million compared to $3.1 million for the same quarter in the prior fiscal year.”
Despite the sustained losses, Day remains optimistic with company making progress on its growth initiatives.
“While our industry remains very competitive, we are optimistic about our ability to maintain the improved year-on-year financial performance and trajectory for our underlying business that we have experienced over the past several years,” Day said. “We are making very good progress in the growth-based initiatives. Specifically, we are targeting the acquisition of businesses and assets that have direct farm origination that add value to our existing asset network and customer base and businesses that extend out reach into new regions and/or product lines. To that effort, we have signed a letter of intent to acquire a company fitting that description and we are working on our due diligence.”
Ceres Global Ag Corp., headquartered in Minneapolis, Minnesota, U.S., is focused on two primary businesses: a grain storage, handling and merchandising unit; and a commodity logistics unit.
Ceres operates six locations in Minnesota, Saskatchewan and Ontario with an aggregate storage capacity of approximately 29.7 million bushels.
Ceres’ Commodity Logistics unit is focused on the development of a Commodity Logistics Centre in Northgate, Saskatchewan, Canada.