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WINNIPEG, MANITOBA -- (Marketwired) -- 05/10/13 -- Ag Growth International Inc. (TSX: AFN) ("Ag Growth", the "Company" or "AGI") today reported its financial results for the three month period ended March 31, 2013, and declared dividends for June, July and August 2013.
Overview of Results
---------------------------------------------------------------------------- Three Months Ended(thousands of dollars) March 31---------------------------------------------------------------------------- 2013 2012----------------------------------------------------------------------------Trade sales (1) $59,913 $72,291----------------------------------------------------------------------------Adjusted EBITDA $7,246 $12,162----------------------------------------------------------------------------Net profit $3,399 $5,299----------------------------------------------------------------------------Diluted profit per share $0.26 $0.42----------------------------------------------------------------------------(1) See "Non-IFRS Measures".
Trade sales and adjusted EBITDA decreased compared to the prior year due to the impact of the severe U.S. drought in 2012. A decrease in sales and adjusted EBITDA was expected as drought events most often impact the first half of the fiscal year following the drought, particularly the first quarter, due to higher than typical dealer inventory levels and lower end-user demand that results from negative sentiment and reduced grain handling requirements. The U.S. drought in 2012 was the most severe in over 50 years and accordingly its impact on the Company's business was significant. AGI's outlook for both on-farm and commercial activity has improved substantially in recent months and accordingly management does not anticipate the impact of 2012 U.S. drought to extend beyond the second quarter of 2013 (see "Outlook").
"As expected, our first quarter results reflect the severity of the 2012 U.S. drought," said Gary Anderson, President and Chief Executive Officer. "However, with the arrival of the 2013 planting season and a new crop year, optimism is returning to the marketplace and we can now look beyond the drought towards to what may be a very exciting year."
"We are beginning to see our backlog for portable handling equipment increase in response to improved moisture conditions in the corn-belt and a very positive USDA forecast for over 97 million acres of planted corn. Our commercial backlog has increased significantly in recent months, due to improving sentiment in the U.S. and our rapidly growing international business. These facilities are in the process of increasing their capacity for the foreseeable future. Offshore, we recently entered into our largest ever contract, a $42 million dollar agreement that includes $28 million of commercial handling, aeration and storage equipment, and $14 million in related services, to a single customer in Ukraine. All said, our order backlogs across all business lines today are much higher than the pre-drought order book we had at this time in 2012."
