Alliance Grain Traders sees better growth on large pulse harvests

 

 

The prospect of large North American pulse harvests, and a clamour for imports in India, has prompted Alliance Grain Traders to forecast continued growth, after doubling earnings so far this year.

 

Supplies of lentils from North America will be boosted by record sowings as farmers cash in on a crop which offers "market leading" returns compared with grains and oilseeds.

 

And the Indian sub-continent, where lentils are a staple food, was providing "positive demand fundamentals" to soak up growing foreign supplies.

 

According to the company, continued adverse crop conditions in India have created a shortage of pulse crops there, adding that it was benefitting too from a dearth of other exportable supplies in the sub-continent.

 

Extra demand and the absence of regional competition in the Indian sub-continent is expected to allow the company to benefit from an opportunity to ship more product to this region at continued good margins, the group said.

 

The comments came as the Canada-based company unveiled a more than doubling in revenues, to CA$186.4 million, and earnings, to CA$16.8 million, for the January-March quarter, boosted by acquisitions.

 

The group in September bought Arbel, the Turkish lentil and grain processor and merchant, for US$93 million.

 

And the company, fresh from a cash call, said it was poised for further acquisitions, both in its core bean and lentil markets and grain sectors it entered with the Arbel purchase.

 

The Alliance Grain Traders results were termed modestly better-than-expected by analysts, edging CA$1 higher to CA$43.00 in its forecast for Alliance Grain shares.

 

However, the stock closed CA$0.59 lower at CA$30.67 in Toronto.