CALGARY, ALBERTA, CANADA — Viterra Inc. on Jan. 11 provided guidance on the projected financial benefits to the company as a result of the new regulatory environment for the marketing of grain in Canada.
With the ability to purchase all grades of wheat, barley and durum directly from growers, the company expects to increase its earnings by attracting additional volumes and optimizing its operational efficiencies. Viterra anticipates the additional volumes at primary grain elevators and port terminals will generate higher revenue from the fixed cost facilities and earn additional merchandising margins. Viterra expects to capture supply chain efficiencies as it executes with a higher degree of precision given direct relationships with the railroads and an unmatched asset network.
Viterra expects to begin realizing modest benefits in the fourth quarter of 2012, with more significant impacts in 2013. In fiscal 2014 and beyond, the company anticipates its annual earnings before interest, taxes, depreciation and amortization to increase by C$40 million to C$50 million per year. This guidance is based on the assumption of an increase in consolidated global pipeline margin of C$2.00 to C$2.50, which includes a 1.0% to 2.5% market share increase.
"This is an exciting era for both Canadian grain producers and for Viterra," said Mayo Schmidt, president and chief executive officer of Viterra. "Viterra has built an impressive global footprint with irreplaceable assets in Canada and South Australia, two of the world's most important export markets, and an international marketing network spanning the globe. This allows Viterra to be a leading exporter of key ingredients and highly competitive on a global basis. With the new marketing freedom in Canada, Viterra's international network will benefit growers as it provides them access to additional global markets."