MINNEAPOLIS, MINNESOTA, US — Ceres Global Ag Corp. marked a “strong rebound” during the second quarter of fiscal 2021 as the company increased volumes to customers in North America and took advantage of market volatility, said Robert Day, president and chief executive officer.
Net income in the second quarter ended Dec. 31, 2020, totaled $1.33 million, equal to 4¢ per share on the common stock, down 43% from $2.33 million, or 8¢ per share, in the same period a year ago. Revenues, meanwhile, increased 12% to $175.27 million from $157.19 million, primarily due to an increase in bushels handled and higher commodity prices.
In the six months ended Dec. 31, 2020, net income was $389,000, or 1¢ per share, which compared with $4.09 million, or 14¢ per share, in the same period a year ago. Revenues in the six months totaled $347.36 million, up 22% from $284.26 million.
“Our recent acquisitions enabled us to drive volume through our North American supply chains more competitively, offsetting the high-priced US rail freight costs that continued to impact cereal grain competitiveness to world markets,” Day said. “In addition, we reached an important milestone by closing on the formation of Farmers Grain, LLC, our joint venture with Farmer’s Cooperative Grain and Seed Association based in Thief River Falls, Minnesota.”
During the quarter, Ceres successfully completed the integration of its Nicklen Siding facility, a grain elevator in Ridgedale, Saskatchewan, Canada, adding to its origination capabilities for core products and providing greater flexibility and solutions to end use customers.
Looking ahead, Day said, “While our volumes are typically lower in the third quarter due to seasonal shutdowns in the Great Lakes and Upper Mississippi River, we plan to maintain our current pace by exporting product through third-party facilities and we are well positioned to take advantage of price distortions caused by ongoing market volatility. Meanwhile, we expect rail freight prices in spring and summer to soften as China shifts its purchasing activity to South America, increasing the competitiveness of US products out of the Great Lakes and Ceres’ ability to export to the world market.
“With the formation of Farmers Grain, LLC, Ceres will increase grower origination in the region and partner with growers to deliver value-added solutions to our downstream customers. The joint venture will undergo an expansion project over the next 18 months designed to enable loading unit trains. Additionally, we remain on track for a summer completion of our soybean crush plant expansion in Jordan, Manitoba, and our pipeline of other greenfield and acquisition opportunities remains strong.”