Viterra’s (ASX: VTA) earnings have risen 15% to A$288 million for the three months to the end of July 2012, compared to the same period last year, as the Agri-Products segment continues to perform strongly.
The Agri-Products segment improved its quarterly results over the prior year due to strong fertiliser pricing, the new fuel business in Western Canada and higher crop protection product sales.
Favourable weather across the Canadian prairies and strong commodity prices led to higher canola and overall seeded acreage which supported increased demand for agri-products.
The segment achieved EBITDA for the three months to the end of July 2012 of $195 million, compared to $163 million from the same period last year, and year-to-date achieved record EBITDA of $273 million.
Fertiliser margins increased during the quarter to $187.44 per tonne, compared to $143.92 per tonne in 2011, bringing the year-to-date margin to $157.74 per tonne, versus $126.46 per tonne in 2011.
The Processing segment’s EBITDA for the three months to the end of July 2012 also improved, increasing to $31 million, compared to $28 million in 2011.
Improved results from canola, malt and oats were in part offset by the pasta operation, which is experiencing competitive pricing pressures.
On a year-to-date consolidated basis, EBITDA was $662 million compared to $590 million in the previous year, while net earnings were $256 million ($0.69 per share) versus $254 million ($0.68 per share) in the corresponding period of fiscal 2011.
Fundamentals for the Agri-Products segment are expected to remain strong in the last quarter of fiscal 2012 due to relatively strong commodity prices that should continue to drive solid returns for producers and their demand for crop inputs.
Viterra has increased its fertiliser margin guidance to $140 to $160 per tonne for fiscal 2012, from its previous guidance of $120 to $140 per tonne.
Strong agri-commodity pricing, increased seeded acreage in Western Canada and higher nutrient requirements from excess moisture in the last two years have supported strong fertiliser demand in fiscal 2012.
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