Canada’s biggest grain handler has beaten its own expectations for “synergies” from the merger of Agricore United into Saskatchewan Wheat Pool.
Viterra last week announced profit of $288.3 million on $6.78 billion in sales and other revenues for 2008. A direct comparison isn’t available, since its 2007 results only included AU’s accounts for part of the year and also included an extra fiscal quarter to bring SaskPool’s year-end in line with AU’s.
But Regina-based Viterra said its record earnings in 2008 were driven mainly by higher gross margins and “increased efficiencies” in its grain handling and marketing, agri-products and agri-food processing segments.
The company last March had predicted $96 million in ongoing “synergies” from the merger but found $110 million in such savings as of Oct. 31, 2008. CEO Mayo Schmidt said the company expects a “full run rate” of $116 million in merger savings by Jan. 31, 2009.
Schmidt also said Viterra is on the lookout to buy businesses with “quality assets, strong management teams and complementary market positions, but they must be available at the right price.”