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Winnipeg Free Press - PRINT EDITION

Canola processor reports sales increase

By: Martin Cash

Posted: 03/22/2013 1:00 AM | Comments: 0 | Last Modified: 03/22/2013 11:25 AM | Updates

SPECIALTY crop and canola processor Legumex Walker Inc. has reported a 66.6 per cent increase in sales along with net loss and negative EBITDA for the fourth quarter.

The Winnipeg-based company is one of the largest pulse and specialty crop processors in Canada with plants throughout the Prairies and the U.S. Midwest.

The company also just commissioned a new canola crushing plant in Washington state.

It's the first canola crusher west of the Rocky Mountains.

Legumex Walker was formed in July 2011, with the merger of Roy Legumex of St. Jean Baptiste, Man., and Walker Seeds of Tisdale, Sask.

Revenues for the fourth quarter were $104 million, compared with $62.4 million for the same period of 2011, and gross profit was $3.9 million, compared with $6.4 million for the same period of 2011.

The net loss for the quarter was $5.4 million, compared with net earnings of $1.9 million last year.

The increase in revenue was the result of acquisitions the company undertook over the past year.

In October, it acquired Keystone Grain Ltd., a sunflowers, flax and specialty crop processor in Winkler and in February 2012, it acquired Minnesota-based St. Hilaire Seed Company, one of the largest dry bean processors in the U.S. and the assets of Anderson Seed Company, a sunflower seed processing operation in Mentor, Minn., with two receiving stations in North Dakota.

This month, the Washington canola plant shipped its first food-grade canola oil and expects commercial level and full production of food-grade canola oil by mid-year.

CEO Joel Horn said profit margins declined as a result of legacy contracts associated with the U.S. acquisitions as well as sharp declines in some commodity prices during the quarter.

Horn said despite the results that show losses from the previous year, the company is in good shape to have a strong 2013.

"We entered 2012 with eight processing facilities and approximately 300,000 metric tonnes of capacity, about 80 per cent of which was concentrated in our lentil and pea division, our lowest margin segment," he said.

"We ended the year with 15 facilities and approximately 875,000 metric tons of processing capacity that is over 40 per cent canola and less than 30 per cent lentils and peas."

Total sales for the year were $294.8 million.

(No comparable results are available because the company only reported results for 171 days in 2011 since it was formed after an initial public offering in July 2011.)

EBITDA for the year ended December 31, 2012, was $1.5 million and there was a net loss for the full year of $12.6 million.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 22, 2013 A13

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Updated on Friday, March 22, 2013 at 11:25 AM CDT: specifies "food grade canola" from Washington plant

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