CALGARY, ALBERTA, CANADA — Viterra announced on Dec. 12 that recently released Australian and Canadian federal government crop production reports indicate positive harvest conditions in both South Australia and Western Canada, which should provide strong volumes for its grain handling and marketing operations in fiscal 2012.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates production for the state of South Australia at 7.9 million tonnes, which exceeds the 10-year average of 6.2 million tonnes by 27%. Given this production estimate, Viterra's management forecasts fiscal 2012 receivals of 6.5 to 7 million tonnes into its southern Australian grain handling network. This is in addition to approximately 1.7 million tonnes of carry-in stocks from fiscal 2011.
During fiscal 2011, South Australia produced a record crop, which led to all-time high shipments of 8 million tonnes for the company. This contributed to a year over year increase of 176% in earnings per share for the first nine months of the company's fiscal year. Given the available volumes predicted for fiscal 2012, Viterra expects shipments to remain strong. The company continues to build on its program of efficiencies in the bulk handling, logistics and transportation systems of its grain handling operations in Australia as evidenced by investments in infrastructure and equipment throughout the year.
According to Statistics Canada, western Canadian production of the six major grains was 49.3 million tonnes during the 2011 harvest season. This represents a 10% increase over the 2010 production figure of 45 million tonnes and is consistent with historical production from this region. Given this production, Viterra's management forecasts western Canadian industry receivals for fiscal 2012 of 31 to 33 million tonnes, which is in line with historical averages.
"Viterra performed impressively in 2011 in the face of global economic uncertainty and we expect our solid business fundamentals to continue," said Mayo Schmidt, Viterra's president and chief executive officer. "In Western Canada, favorable weather led to impressive yields and good crop quality this fall, while in South Australia, harvest is progressing well and we have already received 5.2 million tonnes into our storage and handling network. For the week ending Dec. 11, we received 1 million tonnes, making it one of the biggest weeks of grower receivals for the season. We are optimistic for the year ahead, given solid commodity prices and ample moisture in our key growing regions. Looking beyond 2012, strong global demand fundamentals and new grain marketing opportunities position Viterra favorably to leverage its dual hemisphere sourcing capability and international marketing network."
Viterra will release its fourth quarter and fiscal year end results on Jan. 18, 2012.