REGINA, SASKATCHEWAN, CANADA — AGT Food and Ingredients Inc. announced on March 23 that adjusted earnings for 2014 increased 45% to C$87 million from C$60 million the previous year.
For the quarter ended Dec. 31, 2014, adjusted earnings were C$24.4 million, compared to C$18.2 million for the same period a year earlier.
Revenue for the year was up 19% to C$1.36 billion from C$1.14 for the previous year. Adjusted earnings per share increased to C$1.76 (C$1.75 fully diluted) for the year compared to C$1.09 (C$1.08 fully diluted) for the previous year ended
“It has been a successful year for AGT with what we feel are positive results on earnings. We have a number of strategic initiatives underway to diversify our business in the short term while growing our business in the long-term. The strength of our diversification strategy, both on origins and products, was evident in 2014 and in the fourth quarter particularly, with our new business units in food ingredients and packaged foods performing well,” said Murad Al-Katib, president and chief executive officer. “In the rest of our business, I am pleased with the balanced earnings contributions of all operating divisions in our global system with particular strength shown in the Canadian and Turkish businesses. These two countries are the main drivers of the AGT strategy. We are also pleased with our success in new geographies like AGT India and AGT Africa. These new regions and our food ingredients business are examples of the growth opportunities we feel are ahead for AGT.”
AGT also provided an update on the previously announced third line expansion at its Minot, North Dakota, U.S., pulses ingredient production facility. The announced third processing line in Minot is near completion and is processing test quantities as of March. Early second quarter commercial production ramp up is expected, bringing the capacity of the Minot facility to 105,000 tonnes per year. Other expansions at Minot or conversions of some capacity to food ingredient production within the AGT system in Canada, the U.S., Turkey and China are being considered.
Other projects that may add further value to the Minot facility are being considered by AGT as well, including pre-cooking lines, sterilization lines and blending facilities to produce pre-mixes and formulated systems, which are combinations of ingredients that are marketed to fill a specific function within a food manufacturing system that may be used by various food clients worldwide.
“Feedback from customers on our ingredient platform through our marketing and distribution agreement with Ingredion, along with our Cargill agreement, is progressing positively. We anticipate sales volumes to increase in 2015 to fully utilize the Minot processing plant. As well, we expect that additional capacity will be needed to ramp up sales opportunities as we grow this business unit in 2016 and 2017. Growth in our food ingredients platform is planned to take two dynamic and simultaneous paths. We plan to add more value to current production through further modification of the existing ingredients, like neutralizing the flavor profile of pulse flours, which we expect to assist in growing inclusion rates and sales opportunities. We are planning on dedicating a capital budget of C$10 million to modification lines as well as an additional C$10 to C$20 million in 2016 to expand our building infrastructure to allow two additional lines to be added in Minot. More sales and capacity increases as well as value-added margins in this segment are expected to combine for a compelling earnings growth story. We expect this and other initiatives in this segment may have great growth opportunities ahead for AGT,” said Al-Katib.