Viterra slipped to a quarterly loss due mainly to lower grain margins and a writedown on its fertilizer inventory as farmers delayed applications until later in the spring, it said March 11.
Viterra said it lost $33 million, or 14 cents a share for the first quarter, ended Jan. 31, compared with a profit of $41.2 million, or 20 cents a share for the same period last year.
The first 2009 quarter included a fertilizer inventory writedown of $28.1 million. Excluding that writedown, the net loss for the quarter was $13.6 million, or six cents a share.
Revenue climbed 4.9 per cent to C$1.38 billion.
Analysts had expected a profit of one cent a share and revenue of $1.25 billion, according to Reuters estimates.
“There was no surprise. We knew it was going to be a really bad quarter,” said Robert Winslow, an analyst at Wellington West Capital Markets. “More importantly, we think though, that farmers are starting to come back to the market in Q2. Spring plant ing is coming up, so they are going to come back, dip their toe in and buy fertilizer, and we will get back to more normalized earnings for Viterra by the end of this fiscal year,” Winslow said.
The company’s shares, which have slipped 21.6 per cent in the past year, were off 2.7 per cent at $9.05 during trading March 11.
Viterra, like other fertilizer companies, has grappled with growing inventories as farmers defer applications until later in the spring.
But Viterra, which changed its name from Saskatchewan Wheat Pool after its $1.8 billion takeover of Agricore United in 2007, expects its results to rebound by the third quarter as demand for its agriproducts rebounds.
“It is not unusual to record an operating loss in the first quarter, particularly if fall fertilizer applications do not materialize,” president and chief executive Mayo Schmidt said in a release. “Even with the slow start this year, we expect a solid financial year in 2009.”