World Grain - October 2011 - 14

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Viterra’s third-quarter earnings up on agri-products
CALGARY, ALBERTA, CANADA — Viterra Inc. announced on Sept. 7 that net earnings for the nine months ended July 31 were up 176% to C$256 million, or 69¢ per share, versus C$93 million or 25¢ per share in the same period last year. Earnings for the third quarter almost doubled, increasing to C$123 million or 33¢ per share, compared to C$64 million, or 17¢ per share, for the same period a year ago. Viterra said the third quarter increase reﬂects strong contributions from its agri-products operations and solid performance from its grain handling and processing operations. Favorable weather across the Canadian prairies resulted in good growing conditions for this year’s crop and, when combined with healthy commodity prices, motivated growers to invest in agri-products, the company said. Grain handling and marketing’s revenues increased due to higher commodity prices, a more established international grain group and higher Australian receivals and shipments following a record crop in South Australia. The segment generated C$104 million in EBITDA for the quarter compared to C$101 million in the third quarter of last year. On a year-to-date basis, this segment’s EBITDA was C$424 million compared to C$284 million a year earlier. The majority of the increase relates to Viterra’s Australian operations that contributed C$220.7 million (2010 - C$129.0 million) for the ﬁrst nine months of the ﬁscal year due to record receivals, shipments and additional storage and handling revenues. The remaining increase is attributable to strong results from the North American team and from the international grain group which has generated year-todate EBITDA of C$41 million, after a solid third quarter contribution of C$9 million Agri-products’ revenues increased as a result of robust fertilizer contributions and processing’s revenues increased due to solid contributions from the pasta and oat processing businesses, which were purchased in the latter half of ﬁscal 2010. EBITDA increased over 50% in the third quarter to $162 million compared to $106 million in the corresponding period a year earlier. The Processing segment’s EBITDA was C$29 million for the third quarter compared to C$22 million in the same period last year. The increase was due to the new oat processing business purchased in the fourth quarter of last year and stronger pasta margins. Viterra’s North American food processing contributed C$23 million (2010 C$17 million), while the company’s Australian malt and global feed operations contributed C$6 million and C$1 million, respectively. On a year-to-date basis, the segment’s EBITDA was C$93 million, compared to C$68 million a year earlier.

Viterra extends marketing network in Europe
CALGARY, ALBERTA, CANADA — Viterra Inc. announced on Sept. 14 that its subsidiary in Europe has opened a new marketing ofﬁce in Barcelona, Spain that will further strengthen its ability to market essential food ingredients to key destinations in Europe. “Viterra’s ongoing investment in a strong and diverse international marketing network addresses the solid fundamentals present in our industry. As steady demand for premium food and feed ingredients continues, our company is taking proactive steps to capture new marketing opportunities. Backed by an expansive origination network in North America and Australia, Viterra is well equipped to serve its customers around the world,” said Don Chapman, Viterra’s senior vice-president, International Grain. Viterra has appointed Jose Luis Esteban as managing director to execute business plans in Spain. Esteban will manage the company’s key customer relationships in the region and work in conjunction with Viterra’s overall international marketing network to identify marketing opportunities and manage trade ﬂows.

Kazakhstan’s grain production up 60%
ASTANA, KAZAKHSTAN — Kazakhstan’s grain production is expected to jump this year to 19.2 million tonnes, up 60% on last year’s drought-affected crop, according to a report from the U.S. Department of Agriculture’s (USDA) Foreign Agriculture Service (FAS). These greater exportable supplies in 2011-12 will boost wheat grain exports, and Kazakhstan could beneﬁt from reduced supplies in other high-quality wheat suppliers. Although the planting of some crops were delayed by spring rains, the weather in 2011 during the growing season was near ideal, with resulting much higher yields expected in all crops and especially wheat. Because of beneﬁcial weather, Kazakhstan’s grain production is rebounding this year from last year’s drought-reduced crop, and is
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expected to reach 19.2 million tonnes (16 million tonnes wheat), compared to 12 million tonnes last year (9.7 million tonnes ). Kazakh grain exports are expected to rebound this year as a result of the higher availability, with total grain exports estimated at 8.3 million tonnes (8 million of which is wheat and ﬂour), compared to 5.7 million tonnes last year (5.4 of wheat and ﬂour). Flour exports are expected to continue steady this year, although there may be a little more competition from Russian ﬂour as a result of the much larger harvest there. In the long term, ﬂour exports are unlikely to be a growth area for Kazakhstan as some Central Asian importers have begun developing their own milling industries, although this development will open opportunities for Kazakh wheat grain exports to these markets, FAS said.
October 2011 / World Grain / www.World-Grain.com

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World Grain - October 2011

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