REGINA, SASKATCHEWAN--Saskatchewan Wheat Pool reported net
earnings for the second quarter ended January 31, 1998 of $7.2
million or $0.24 per share, more than double last year's second
quarter net earnings of $3.3 million or $0.11 per share. Higher
grain handling volumes and stronger agri-food processing results
were chiefly responsible for the increase.
Operating earnings in grain handling and marketing were 52 percent
ahead of last year while earnings from agri-food processing
increased by 181 percent. Overall, second quarter earnings before
interest, taxes, depreciation and amortization (EBITDA) were ahead
by 19 percent while earnings before interest and taxes (EBIT) were
up 50 percent compared to 1997.
"Our core grain handling business had another strong quarter,"
said Don Loewen, the Pool's Chief Executive Officer, "and
agri-food processing showed considerable improvement over last
year."
For the first six months of fiscal 1998, the Company recorded net
earnings of $16.9 million or $0.57 per share, a 38 percent
increase over last year's $12.3 million or $0.41 per share.
EBITDA and EBIT for the Company were ahead 21 percent and 26
percent, respectively, compared to the first six months of fiscal
1997. Six month cash flow from operations was $45.3 million or
$1.53 per share, an 11 percent increase from $40.6 million or
$1.37 per share one year earlier.
For the first six months of the 1998 fiscal year, grain handling
volumes increased 12 percent over 1997. The increase was largely
attributable to good weather, improved transportation, and the
marketing plan of the Canadian Wheat Board which has pulled
deliveries forward from the last half of the year.
Port terminal handlings were ahead 30 percent with increases
reported at all facilities. One-half of the increase was recorded
at Thunder Bay while the Pool's affiliates accounted for a further
one-third of the volume gain.
/T/
Six Month Handling Volumes to January 31
----------------------------------------
(millions of tonnes) 1998 1997
---- ----
Primary Elevator System 5.69 5.10
---- ----
---- ----
Terminal Operations
Vancouver - SWP 1.41 1.26
Thunder Bay - SWP 1.95 1.43
Share of Affiliates 1.12 0.75
---- ----
4.48 3.44
---- ----
---- ----
/T/
Six month operating earnings for agri-food processing were $9.9
million, an increase of 58 percent over last year. Sales for the
first half of fiscal 1998 increased by 9 percent to $340 million
from $313 million in fiscal 1997.
CanAmera has been the major contributor to this segment's
turnaround, recording higher sales and much improved margins due
to a healthier Canadian canola processing sector. To January 31,
1998, CanAmera's crushing volumes were ahead by 19 percent over
1997.
The Company is presently in the midst of a two to three year major
capital spending program to further its two major strategies - the
development of western Canada's most efficient grain handling
network and the growth of its value-added businesses.
"The grain handling and value-added strategies go hand in hand",
says Don Loewen. "The company's elevator expansion across western
Canada, the livestock feed and hog production initiatives and
investments in companies like Fletcher's Fine Foods and Can-oat
Milling will result in the Pool becoming a larger and stronger
agri-business co-operative".
Saskatchewan Wheat Pool is Canada's largest publicly traded
agri-business co-operative. The company's Class B shares are
listed on the TSE under stock symbol SWP.B.
/T/
Consolidated Statements of Earnings and Retained Earnings
(in millions of dollars, except per share amounts)
Three Months Ended Six Months Ended
January 31 January 31
(unaudited) (unaudited)
----------- -----------
1998 1997 1998 1997
Sales and other
operating revenues $988.7 $958.6 $2,031.5 $2,004.5
------ ------ -------- --------
Operating income before
interest &
securitization expenses 17.4 11.3 42.8 34.1
Interest and securitization
expenses (6.9) (4.2) (14.3) (10.6)
------ ------ -------- --------
Earnings from operations 10.5 7.1 28.5 23.5
Equity earnings 0.4 - 0.5 -
Non-controlling interest (0.2) (0.1) (0.3) (0.2)
----- ------ -------- --------
Earnings before corporate
taxes 10.7 7.0 28.7 23.3
Provision for corporate
taxes (3.5) (3.7) (11.8) (11.0)
----- ----- ------ ------
Net earnings $7.2 $3.3 $16.9 $12.3
----- ----- ------ ------
----- ----- ------ ------
Earnings per share $0.24 $0.11 $0.57 $0.41
------ ------ ------ ------
------ ------ ------ ------
Sales and Operating Revenues by Segment
(in millions of dollars)
Three Months Ended Six Months Ended
January 31 January 31
(unaudited) (unaudited)
----------- -----------
1998 1997 1998 1997
Grain handling
and marketing $704.9 $714.8 $1,495.4 $1,522.8
Farm supplies 82.2 63.5 156.7 140.6
Agri-food processing 177.0 160.9 339.5 312.8
Livestock marketing 32.7 24.7 58.0 42.8
Publishing and Other 3.8 5.7 6.9 11.7
Intersegment sales (11.9) (11.0) (25.0) (26.2)
------- ------ -------- --------
$988.7 $958.6 $2,031.5 $2,004.5
------- ------ -------- --------
------- ------ -------- --------
Earnings from Operations
(in millions of dollars)
Three Months Six Months
Ended January 31 Ended January 31
(unaudited) (unaudited)
--------- ---------
1998 1997 1998 1997
Grain handling and
Marketing $ 9.5 $6.2 $35.0 $23.2
Farm supplies 7.1 7.7 7.4 14.6
Agri-food processing 6.3 2.2 9.9 6.3
Livestock marketing 1.8 1.4 3.1 1.9
Publishing and Other 0.5 0.4 1.3 1.0
---- ---- ---- ----
25.2 17.9 56.7 47.0
Corporate expenses (7.4) (6.6) (13.4) (12.9)
Interest &
securitization expenses (6.9) (4.2) (14.3) (10.6)
Equity earnings (included
in Agri-food processing) (0.4) - (0.5) -
---- ---- ---- ----
$10.5 $7.1 $28.5 $23.5
---- ---- ---- ----
---- ---- ---- ----
Consolidated Statement of Financial Position
(in millions of dollars)
As at January 31, 1998
1998 1997
Current assets $633.1 $511.6
Investments 57.0 14.7
Capital assets 530.0 436.2
Other long-term assets 47.5 35.7
----- -----
$1,267.6 $998.2
------- -----
------- -----
Current liabilities $503.4 $390.8
Long-term debt 199.0 96.0
Other long-term liabilities 39.2 28.3
Non-controlling interest 4.3 1.7
Shareholders' equity 521.7 481.4
----- -----
$1,267.6 $998.2
------- -----
------- -----
Consolidated Statement of Changes in Financial Position
(in millions of dollars, except cash flow per share)
Six Months Ended January 31
1998 1997
Net earnings $16.9 $12.3
Depreciation and amortization 24.6 21.8
Other 3.8 6.5
---- ----
Cash flow provided by operations 45.3 40.6
Changes in working capital (38.2) (11.8)
---- ----
Net funds provided by operations 7.1 28.8
Capital expenditures (106.4) (45.4)
Increase in investments (14.8) (15.1)
Increase in non-controlling interest 2.3 -
(Decrease)/Increase in
long-term debt (3.2) 14.9
Increase/(Decrease)
in share capital 0.2 -
----- ----
Increase in bank financing (114.8) (16.8)
Bank financing beginning of year (107.5) (169.5)
----- -----
Bank financing end of year (222.3) (186.3)
----- -----
----- -----
Cash flow per share $ 1.53 $ 1.37
----- -----
----- -----
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Saskatchewan Wheat Pool
Donald K. Loewen
Chief Executive Officer
(306) 569-4806
swp.com
or
Saskatchewan Wheat Pool
Lyle A. Spencer
Executive Vice President, Finance & Chief Financial Officer
(306) 569-4341 |
