VITERRA'S Australian grain handling and storage operation contributed more than two-thirds of the company's earnings before interest and tax in the first quarter of fiscal 2010.
The company’s results were announced at its annual general meeting in Canada last Thursday.
Consolidated sales and other operating revenues for the quarter grew 29 per cent - or by $404 million - to $1.8 billion.
Earnings before interest and tax were $89.8m, with $66.6m coming from the company's Australian operations.
President Mayo Schmidt said this was a great result, especially compared with the first quarter EBIT loss of $6.4m in 2009, which included a fertiliser inventory write-down of $28.1m. Viterra's first quarter net earnings were $10.7m or $0.03 per share compared with a net loss of $33m or $0.14 a share in the same three-month period of 2009.
"We have been very pleased with our entry into the South Australian marketplace," Mr Schmidt said.
Receivals into SA were 6.2 million tonnes and the majority of the margin contribution came from receival revenues.
Shipments were marginal at 0.6mt for the quarter.
Mr Schmidt said growers were reluctant to sell their grain during harvest because of low commodity prices.
"Management believes this is a timing issue and that the majority of SA's margin contributions from storage, shipping and merchandising activities will materialise during the balance of the year," he said.
Mr Schmidt said results from the company's acquisition of ABB Grain reflected "normalised conditions for the business".
"We are implementing a proven pipeline grain handling and marketing model for our core operations focused on an integrated grower relations program and a comprehensive handling, logistics and international marketing strategy," he said.
"It is a model we are confident will improve the value proposition for all stakeholders over the long-term and solidify Viterra as the marketer of choice within the region."
Mr Schmidt said at the moment fertiliser availability was good, but there was the potential for supply to tighten.
"The fertiliser business has been a tricky one," he said.
"When the fertiliser price got very high, North American demand, then global demand, diminished.
"We're now seeing signs of strength in both price and demand."
When asked about the potential to broaden the company's reach in the livestock sector, Mr Schmidt said he did not intend to go down that path.
"I intend to stick to our core focus on healthy food ingredients," he said.
At the AGM, Mr Schmidt also announced the acquisition of Dakota Growers Pasta Company, a leading producer of dry pasta products in North America.
The all-cash transaction, structured as a tender offer followed by a merger, represented a total enterprise value of $C240m, and had been approved by the boards of directors of both companies.
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