WINNIPEG, MANITOBA, CANADA — Ag Growth International, Inc. said despite significant headwinds the company performed well in the three and nine months ended Sept. 30.

AGI reported a diluted per share loss of C15 for the quarter and profit of C$1.21 for the nine months. That compared with profit of C$1.14 and C$2.25 a year ago.

Results were impacted by the addition of 1.9 million common shares in the fourth quarter of 2018, the proceeds of which contributed to funding the acquisition of Milltec in March. 

“Due to the timing of the acquisition, the net earnings of AGI for the nine months ended Sept. 30, 2019, includes only two seasonally low quarters of Milltec,” AGI said.

Trade sales in the third quarter of 2019 increased over the prior year due to higher sales of portable grain handling and drying equipment, sales growth in Brazil and a strong performance from AGI’s recent acquisition in India. Sales growth in the quarter was tempered by challenging Farm conditions in both Canada and the United States, as well as by global economic uncertainties and their impact on the timing of customer commitments, most notably in offshore markets.

“Despite significant headwinds, and excluding acquisitions, AGI sales in both the quarter and nine-months ended Sept. 30, 2019, were equal to our record results in 2018,” said Tim Close, president and chief executive officer of AGI. “Inclusive of acquisitions we grew sales by 7% in both periods as we brought on our platform in India, expanded our food platform into beverages and grew our technology platform. The contribution from these three areas further diversifies AGI, adding growth levers outside of our traditional base in North American grain. Gross margins and backlogs have remained stable compared to the prior year and we are positioned well to respond to improving markets in 2020. We will continue to work with our customers as they invest in their infrastructure and the technologies required to remain productive and profitable in a challenging and changing environment.”

AGI’s Commercial business has a global footprint and its demand drivers include global commodity production and consumption, infrastructure deficiencies in developing markets, storage and handling efficiencies and food security.

In the United States, Commercial Grain handling activity is stable but for the last number of years has been restrained by depressed agricultural markets and international trade disputes. Nevertheless, AGI’s sales order backlog in the United States is higher than the prior year due to progress in the fertilizer and food categories, AGI said.

In Canada, the Commercial market remains active due to continued investment in grain infrastructure, including in port facilities and inland terminals. However, compared to the prior year, the Canadian Commercial backlog has decreased due to the impact of deliveries made on large Canadian grain projects in the third quarter of 2019 and because the 2018 comparative included a large fertilizer project.

International sales in 2019 have been negatively impacted by global economic uncertainties, including trade disputes.

Nonetheless, consistent with commentary from recent quarters, AGI’s sales order backlog is tracking to levels similar to the prior year and it continues to add to its 2020 order book. Sales in Brazil continue to gain momentum due to increasing brand and product awareness and improving economic conditions in the country. In India, precipitation amounts from the 2019 monsoon now approximate historical averages, and management anticipates seasonally strong sales in the fourth quarter of 2019. Overall, management anticipates Commercial sales in the fourth quarter of 2019 to approximate the prior year.