June 13, 2012

Viterra's Q2 earnings double on higher shipments

Just weeks ahead of a pending takeover by Glencore International Plc, Viterra Inc's second-quarter profit more than doubled on increased shipments in North America.

The best start to spring planting in at least three years in Western Canada, Viterra's base, boosted results, the company said, and expanded planted area.

The company estimated that farmers in Western Canada planted 60 million acres in 2012, on par with historical levels and well above last year's 55.4 million acres, when flooding took much land out of production.

It pegged the region's rapeseed plantings at a record-high 20.3 million acres, compared with 18.7 million acres a year ago.

Viterra, also the dominant grain handler in South Australia, estimated total planted acreage there to increase 5% to 9.8 million acres. Net profit for the quarter rose to CAD67.1 million (US$65.2 million), or CAD0.18 per share, from CAD30.2 million (US$29.4 million), or CAD0.08 cents per share, a year ago.

Grain handling and marketing revenue for Viterra rose 33% to CAD2.72 billion (US$2.6 billion). The price of rapeseed, one of Western Canada's biggest crops, spiked during the quarter as drought damaged South America's soy crops.

Sales of agri-products rose 59% to CAD691 million (US$672 million), as an early start to spring planting in Western Canada moved up the timing of seed and fertiliser sales. Overall revenue for the company jumped more than one-third to CAD3.55 billion (US$3.45 billion).

Analysts had on average expected Viterra to earn CAD0.12 a share on sales of CAD2.6 billion (US$2.53 billion), according to Thomson Reuters I/B/E/S. Viterra shareholders have already approved the takeover bid from Glencore, but some Canadian regulatory approvals are still needed. The deal is expected to close by the end of July.