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Ag Growth Announces Second Quarter 2017 Results; Declares Dividends

WINNIPEG, Aug. 10, 2017 /CNW/ – Ag Growth International Inc. today announced its financial results for the three and six-month periods ended June 30, 2017, and declared dividends for September, October and November 2017.

Trade sales and adjusted EBITDA significantly exceeded previous highs due to AGI's strong market position in the robust Canadian Farm and Commercial markets, improving demand for portable grain handling equipment in the U.S. and the contribution of recent acquisitions as AGI continues to diversify its geographic and end market exposure. Higher sales and a continued focus on operating margins resulted in a significant increase in adjusted EBITDA, profit and profit per share compared to the prior year.

"Strong performance in our Farm and Commercial business units resulted in record second quarter results." said Tim Close, President and CEO of AGI. "We are seeing positive year-over-year increases in many parts of AGI as we focus on our customers and realize the benefit of both organic investment and recent acquisitions.   Acquisitions in 2016 and 2017 added meaningful contribution to these results however we are just starting to see the potential of our investments in Brazil, our Fertilizer and Seed platform, our global Commercial platform and our Food equipment division.  We have made substantial investments in these initiatives, we are making good progress on each, and we are excited about the near-term growth potential as we pursue our Field to Consumer strategy.  We are also continuing to invest in these initiatives in terms of people and capital while exploring new opportunities to expand each platform."

OUTLOOK

Sales of Farm equipment in Canada remain very strong and order backlogs are well above the prior year. As a result, management anticipates third quarter Canadian Farm sales to exceed a very strong 2016 comparative. Hot and dry weather in certain areas of western Canada has the potential to lower yields and expedite harvest, which may lead to higher inventory carryover at some dealers, however the impact in Q4 is not currently expected to be significant. In the United States, improving Farm market dynamics have resulted in higher sales of portable grain handling equipment compared to 2016. Although crop conditions in the U.S. are not as favourable as at the same time a year ago, management anticipates improving demand dynamics and pent up demand for portable equipment should more than offset the impact of potentially lower crop volumes, and sales in the third and fourth quarters of 2017 are expected to exceed the prior year.

Certain areas of western Canada and the United States have experienced hot and dry weather in 2017, which may lower crop yields and impact demand for AGI equipment.