Viterra profit jumps 80 pct on big Australia crop

By Rod Nickel

WINNIPEG, Manitoba (Reuters) – Viterra Inc posted an 80 percent rise in quarterly net profit on Thursday, bolstered by brisk South Australian crop shipments, and its share price rose.

Canada’s biggest grain handler said record-high crop shipments from South Australia boosted earnings even as wet weather delayed planting in Western Canada and hurt sales of farm products like seed and chemicals.

Even so, Viterra’s quarterly earnings per share of 9 Canadian cents came in sharply below the average analyst estimate of 17 Canadian cents, causing the stock to slip early in Toronto before turning higher.

“There are questions as to whether their grain group can contribute in a declining price environment, but overall, I am not too disappointed,” said Jason Zandberg, an analyst at PI Financial Corp. “The (Canadian) seeding business is just delayed, hopefully, and should show up in the next quarter.”

Viterra shares rose 17 Canadian cents or 1.6 percent to C$11.12 on the Toronto Stock Exchange.

Expectations are high for the former Canadian farmer co-operative as it digests acquisitions in Australia and the United States, and with wheat and canola prices still relatively high.

The company posted its second-biggest annual profit last year and stands to gain from Canada’s plans to scrap the Canadian Wheat Board grain monopoly next year.

Viterra’s Australia crop-handling network of elevators and port terminals has given the company a geographic hedge against weather-related crop problems in Canada since it acquired ABB Grain in 2009.

“From a strategic perspective, our geographic diversification has delivered to expectations,” said CEO Mayo Schmidt.

Regina, Saskatchewan-based Viterra said it had achieved its forecast C$30 million ($30.6 million) in synergies from the ABB takeover six months ahead of schedule.

Net profit rose to C$33.1 million ($33.8 million), or 9 Canadian cents a share, for the second quarter ended on April 30, from C$18.4 million, or 5 Canadian cents, a year earlier.

Revenue rose 33 percent to C$2.70 billion.

Analysts had expected earnings of 17 Canadian cents a share and revenue of C$2.3 billion, according to Thomson Reuters I/B/E/S.

Viterra also declared a semiannual cash dividend of 5 Canadian cents per share, payable July 28. The company’s dividend rate is currently 10 Canadian cents per year.

($1 =0.980 Canadian) (Reporting by Rod Nickel in Winnipeg and Aftab Ahmed in Bangalore; Editing by Savio D’Souza and Lisa Von Ahn)