Viterra sales fall 17.6 per cent in fourth quarter, agricultural giant reports small loss

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CALGARY - A 17.6 per cent drop in revenue and higher costs from its expansion into the Australian market combined to produce a small loss at Viterra Inc. (TSX:VT) in the fourth quarter, in stark contrast to a year-earlier profit of $46.8-million
The Canadian grain handler and farm supplier said Thursday its revenue in the quarter ended Oct. 31 was $1.4 billion, down $300 million or from a year earlier.
Viterra attributed that to a significant decline in commodity prices, which were down from record highs experienced a year earlier.
It also recorded a small loss of $900,000 or less than a cent per share, compared with a profit of $46.8 million or 20 cents a share a year earlier.
However, Viterra's president and chief executive described 2009 as a "defining year" for the company which, he said, is in solid financial condition and prepared for future expansion.
"We completed the year as a more geographically diverse company, yet we maintained the financial stability that has become our hallmark," Viterra president and chief executive May Schmidt said in a statement.
Viterra retained more than $1 billion of cash and short-term investments and approximately $800 million is available for future growth initiatives, he added.
Several factors hit Viterra's profit in the fourth quarter, including a dramatic increase in financing expenses and higher costs related to the integration of acquired companies.
The company, renamed Viterra after Saskatchewan Wheat Pool bought Agricore United, incurred $5.1 million of integration costs during the quarter - more than double the $2.4 million recorded a year earlier.
Viterra said $2.3 million of the most recent quarter's integration costs were related to its recent acquisition of ABB Grain Ltd. in Australia and $2.8 million to Agricore.
In addition, financing expenses nearly quadrupled to $24.1 million, up from $6.3 million in the fourth quarter of 2008. The most recent quarter included additional interest expenses for $300 million of notes issued last July, $100 million drawn on a term facility and Viterra Australia's financing costs.
On the sales side, Viterra's sales and operating revenue from grain handling and marketing fell to $986.4 million, down nearly 17 per cent from $1.82 million a year before.
Sales of agri-products fell even more dramatically, to $240.1 million from $308 million in the fourth quarter of fiscal 2008 - a 22 per cent decline.

Organizations: Viterra, TSX, Agricore United Saskatchewan Wheat Pool ABB Grain

Geographic location: CALGARY, Australia

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