Viterra expects eight-figure gains from CWB deregulation

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Grain handler forecasts added $40M-$50M in EBITDA by 2014

Canada?s biggest grain handler is now set to predict what it will gain from the closing of the Canadian Wheat Board?s single marketing desk.

In a guidance statement ahead of the release of its fourth-quarter and year-end financial data next week, Viterra said it expects its earnings before interest, taxes, depreciation and amortization (EBITDA) to rise by between $40 million and $50 million per year in fiscal 2014 and beyond as a result of the end of the single desk.

With forward-contracting of Prairie wheat, durum and barley already underway for direct deliveries pending formal deregulation on Aug. 1, Calgary-based Viterra said Wednesday it expects to begin "realizing modest benefits" in its fourth quarter of 2012, with "more significant impacts" in fiscal 2013.

Following the passage of the federal government?s Bill C-18 last month, Viterra became the first grain company to offer bids to buy wheat, barley and durum directly from Prairie growers.

"Additional volumes" at the company?s primary grain elevators and port terminals are expected to generate higher revenue from its fixed-cost facilities, and to earn "additional merchandising margins," the company said.

Its additional grain purchases from farmers as a result of open wheat, durum and barley marketing is expected to require $150 million to $200 million of "incremental working capital," Viterra said.

Read more at http://agcanada.com/daily/viterra-expects-eight-figure-gains-from-cwb-deregulation/
 
 
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