WINNIPEG, MANITOBA, CANADA — AGI posted robust trade sales in the first quarter ended March 31, with demand for farm equipment and contributions from recent acquisitions offsetting challenging winter conditions in North America.
Sales reached C$216.2 million for the quarter, up from C$214 million a year earlier.
Adjusted profit was down in the quarter, AGI said, largely due to increases in non-cash interest expense and intangible amortization, and an income tax recovery in 2018. Adjusted profit was C$4.99 million, which compared with C$11.5 million a year earlier. Without the adjustments, profit was C$13.2 million for the quarter, up from C$4.9 million in the same period a year earlier.
“A very busy first quarter saw us close three important acquisitions,” said Tim Close, president and chief executive officer of AGI. “Our platform acquisition of Milltec in India provided AGI with expertise in rice milling solutions as well as a deep management team, beginning a new era for AGI given the significant growth opportunities in the rice vertical and in India and southeast Asia. The Bin Manager sensor network and Field Data Manager tools, brought together in IntelliFarms’ SureTrack grain management solution, opens new ways for us to add unique value for our customers and further differentiate AGI. The acquisition of Improtech expanded our Food platform and provided AGI with additional expertise within the food and beverage industry.”
Close said adjusted EBITDA was consistent against a strong 2018, and the company is positive heading into the second quarter.
The company’s commercial backlog in Canada is strong due to continued investment in Canadian commercial grain handling infrastructure, including in port facilities and inland terminals.
In the United States, commercial activity is expected to remain stable compared to the prior year. Offshore, sales in the first quarter were the second highest on record and backlogs remain above the strong levels of 2018 due largely to a higher backlog in Brazil and contributions from acquisitions.
AGI’s quoting pipeline in EMEA and elsewhere is active and management anticipates the current backlog will increase in the near term. Commercial sales growth is anticipated in the second quarter of 2019 and fiscal 2019, however the expectation remains that sales growth in all regions, including Brazil, will be weighted toward the second half.
Overall, AGI’s backlog for farm equipment is higher than at the same time in 2018 and management anticipates the second quarter of 2019 and fiscal 2019 sales to increase over the prior year.