WINNIPEG – Grain handling equipment maker Ag Growth International Inc. (TSX:AFN) said Monday its third-quarter net earnings fell to $4.6 million from a year-ago $15.2 million as sales slipped on weather-related weakness in the industry, less than optimal growing conditions in the U.S. and the impact of a stronger Canadian dollar.
The Winnipeg-based company said its earnings amounted to 36 cents per share, compared with $1.12 in the year-ago period. Sales in the period were $81.8 million, down from $86.9 million.
“Our commercial divisions continue to deliver solid results, however, we also faced a number of challenges in the third quarter,” president and CEO Gary Anderson said in a statement.
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“Sales of portable grain handling, aeration and temporary storage equipment were negatively impacted by a fast and dry harvest in western Canada and an unusual growing season and reduced crop yields in the United States. In addition, our financial results were significantly impacted by start-up challenges at our Twister greenfield plant, while regional market issues, primarily the result of a 2010 drought in northern Europe, negatively impacted our Finland-based Mepu division.”
The fourth quarter is typically a slow one for Ag Growth, with lower demand for portable grain handling gear as its customers begin to build inventories after the harvest. However, the company remains optimistic about its potential for growth in 2012, Anderson said.
“We are confident the start-up challenges at our greenfield storage bin facility will have been largely addressed by the end of 2011, and as a result expect a significant contribution from this product line in 2012.”
“Finally, we remain enthusiastic about our international prospects, as positive agricultural fundamentals are expected to continue to drive international sales, as evidenced by recent successes in Ukraine and Latin America.”
Ag Growth’s monthly dividend was left unchanged at 20 cents per share.
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