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Ceres Global Ag Corp released their financial results for the three months of business that ended June 30, 2015. The results were posted on Aug. 5, indicating a gross profit of $1.9 million compared with a $1.2 million profit for the same time span in 2014, thanks largely to increased net trading margins.
The company said it registered revenues of $59.3 million in the first quarter versus $51.5 million for the same period in 2014.
General and administrative expenses declined by $900,000 from $3.4 million in the first quarter of 2014 to $2.5 million for the first quarter of 2015.
Ceres entered into an agreement to sell its Electric Steel grain facility in Minneapolis, Minn. to the University of Minnesota for gross proceeds of US$1.45 million. This sale is subject to final approval by the university鈥檚 board of regents.
In the report, Ceres noted a continued expansion of their grain operations in Northgate, Sask. Their new commodities logistics centre located in that border community, handled 0.6 million bushels of grain in the second quarter compared with 1.7 million bushels for the quarter that ended on March 31. The decline, quarter over quarter was due to normal seasonal road restrictions (road bans) and producers who were beginning their annual field work.
Through to July 31 of this year, Ceres said it has loaded 186 grain railcars at Northgate. They also signed an agreement with a subsidiary of Parkland Fuel Corporation for transloading propane at Northgate. The company said it anticipates Northgate could facilitate the transloading and shipment of additional payloads such as fertilizers or oil-based materials going forward. As it stands now, the company has already loaded 190 railcars of propane at the Northgate hub.
鈥淣orthgate鈥檚 build-out progessed on time and on budget during the first quarter,鈥� said Ceres CEO, Patrick Bracken. 鈥淲hile we are still in the building phase, we are not waiting to take advantage of the value and strategic location of Northgate as evidenced by the increased diversity of first quarter activity, which included grain and propane handling. We expect this business to grow throughout fiscal year 2016 by further leveraging the logistical advantages of Northgate with additional oilfield products and agricultural inputs.鈥�
The company has two sets of rail tracks leading into the Northgate centre, running in a parallel configuration which will allow trains, operated by the American-based BNSF Railway, to pick up Saskatchewan-based commodities for direct shipment to the United States for milling or refining and delivery to customers.
The $90 million build out that won鈥檛 be fully completed until March of 2016, includes a grain terminal that will be capable of storing up to 2.2 million bushels of grain and other agricultural commodities, as needed.
In it鈥檚 latest three-month report the company noted it incurred a non-cash expense of $836,000 relating to the revaluation of its derivative warrant liability. In connection with the rights offering in December of 2014, the corporation issued warrants, which are subject to shareholder approval.
The consolidate net loss was $1.7 million for the quarter that ended June 30, compared with the net loss of $2.1 million for the same time period a year ago.
Management said they believe cash flow from operations will be adequate to fund operating expenditures, maintenance of capital interest and income tax obligations. Growth in capital expenditures in the next 12 months will be serviced by anticipated increases in cash flow and will only be borrowed within the company鈥檚 debt covenant limits.
The company opened a new grain merchandising office in southeast Ontario this year which they said they expect will play a significant role in extending the company鈥檚 trading and merchandising reach into Ontario and Eastern Canada.
At the company鈥檚 annual general meeting in Toronto on Aug. 6, Bracken was re-elected to the board of directors along with six others.
Besides its operations in Northgate, Ceres holds a 100 per cent ownership of Riverland Ag Corp located in Minnesota, as well as a 25 per cent stake in the Stewart 麻豆传媒AVern Railway which operates along a 130 km rail system in southeast Saskatchewan. The nine grain handling and storage facilities owned by the company are located in Minnesota, New York and Ontario. They have an aggregate storage capacity of about 47 million bushels. Riverland also operates two more facilities in Wyoming on behalf of it鈥檚 customer-owner. 聽
