WINNIPEG, MANITOBA, CANADA — A late, wet harvest in the United States and a delay in several commercial projects lowered earnings for Ag Growth International (AGI) in 2019.
Profit for the year ended Dec. 31, 2019, was C$14.63 million, down from C$26.61 million the previous year. Trade sales were C$999.93 million, up from C$934.1 million last year.
Fourth-quarter results were mixed, with strong demand for portable grain handling and drying equipment, solid performance in India and improved results in Brazil offset by a combination of factors.
The company sustained a loss of C$8.28 million for the fourth quarter and trade sales of C$229.6 million.
A very wet and late harvest in the United States and a continuation of the weak macro environment negatively impacted AGI's grain storage systems business. Several commercial projects in Canada and offshore were postponed into 2020 at the request of customers, resulting in a deferral of sales and earnings, AGI said.
“As the world comes to terms with how to respond to the developing COVID-19 crisis I would like to thank all of the employees, suppliers and customers of AGI for their perseverance in a period of such heightened stress and uncertainty,” said Tim Close, president and chief executive officer of AGI. “The COVID-19 crisis will have an impact on our business in 2020, however we are working to mitigate the impact and prepare for the post COVID-19 world.”
AGI said it has suspended manufacturing at its plants in Italy, India, France and Brazil due to government mandated shutdowns and/or regional requirements.
The shutdowns are scheduled to last two to three weeks. Interruptions in North America are possible over the coming weeks, AGI said.
Engineering, design and quoting activity is continuing in each of these businesses, which will support resumption of operations.
“We are utilizing vacation time, leave, and government programs to mitigate the impact of these short suspensions,” the company said. “The impact on AGI would be more pronounced should the duration extend.”
Brazil, France and Italy currently have record level backlogs, and India has robust back logs. Although AGI's business will be substantially impacted by these disruptions in production, management believes that post crisis demand will be positively impacted as the world builds additional redundancy into the global food infrastructure to account for similar events in the future, AGI said.
The company said the safety of its people is the highest priority. Close acknowledged its team in northern Italy, which developed the policies and procedures to safely operate right up to the recent mandatory suspension. In one of the hardest hit regions, the facility did not have one positive COVID-19 case.
“They have been an inspiration to the rest of AGI as we implement many of those same procedures across our business to provide a safe environment for all of our teams,” Close said. “AGI's products, services and technologies have been declared an essential service in multiple states and provinces; recognition of the critical nature of the global food infrastructure that we supply.”
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