Viterra last week said quarterly profit fell 47 per cent as a wet spring slashed Western Canada’s crop acreage and the company accounted for one-time costs.
Reduced Canadian plantings hurt sales of fertilizer and chemicals, cutting agri-products revenue by 13 per cent and limiting North American grain shipments.
Analysts were braced for the impact of smaller plantings after Viterra issued a warning in early July, and the company’s earnings per share excluding one-time items were only slightly below analyst expectations.
“Going forward, it still looks pretty strong,” said Jason Zandberg, analyst at PI Financial Corp. “The quarter didn’t blow the doors off but I don’t know that there’s anything to be too concerned about here.”
Viterra shares rose 0.2 per cent to C$8.52 in Toronto last Wednesday.
Viterra, which also owns South Australia’s main grain storage and handling facilities, reported net income including one-time costs of $63.5 million or 17 cents a share, for its third quarter ended July 31. That’s down from $120.7 million, or 51 cents, a year earlier.
CEO Mayo Schmidt said he expects Western Canadian production of 44 million to 45 million tonnes, which would be well below the 10-year average of 49 to 50 million tonnes.
Canadian fertilizer maker Agrium is on the verge of following Viterra’s move to Australia by acquiring grain handler and farm retailer AWB Ltd, but Schmidt sees no significant overlap with Viterra’s operations.
The company’s focus is on integrating its recent acquisitions, including oat and durum processors in the United States, not seeking new ones, Schmidt said.
“I don’t see anything that’s immediate, but the market’s very active and you won’t find Viterra taking a passive position on things that are important to us.”