TORONTO, ONTARIO--(Marketwire - Feb. 9, 2010) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES OF AMERICA
The management of Ceres Global Ag Corp. ("Ceres" or the "Corporation") (TSX:CRP)(TSX:CRP.WT) is announcing its results for the fiscal quarter and nine-month period ended December 31, 2009.
The performance of the public market portfolio continued to improve during the third quarter of the fiscal year ending March 31, 2010 ("Q2 2010"). As at December 31, 2009, the net asset value attributable to each outstanding Common Share and related Warrant was $9.71, compared to the following values as at the following dates:
| September 30, 2009: | $ 9.02 |
| June 30, 2009: | $ 8.26 |
| March 31, 2009: | $ 7.42 |
| December 31, 2008: | $ 6.36 |
The net asset value as at December 31, 2009 represents an increase of 7.6% for the quarter then ended.
For the nine-month period ended December 31, 2009, Ceres reported net income of $28,069,321, which included an unrealized gain on investments in the amount of $19,182,229 (nine-month period ended December 31, 2008: net loss of $56,597,568, including an unrealized loss on investments of $34,212,869). For the quarter ended December 31, 2009, Ceres reported net income of $8,102,028, which included an unrealized gain on investments of $2,151,507 (quarter ended December 31, 2008: net loss of $29,521,078, which included an unrealized loss on investments of $3,053,068). For the nine-month period ended December 31, 2009, basic and diluted earnings per share were $2.20 (nine-month period ended December 31, 2008: basic and diluted loss per share was $4.39). For the quarter ended December 31, 2009, basic and diluted earnings per share was $0.65 (quarter ended December 31, 2008: basic and diluted loss per share was $2.29).
For the nine-month period ended December 31, 2009, Ceres earned dividend, interest and other revenues totalling $2,817,039 (nine-month period ended December 31, 2008: dividend, interest and other revenues totalled $2,039,938). For the quarter ended December 31, 2009, dividend, interest and other revenues totalled $1,235,665 (quarter ended December 31, 2008: dividends, interest and other revenues totalled $759,353).
Ceres invests primarily in equity and debt securities of publicly traded companies located in Canada, the United States of America and other countries. As at December 31, 2009, Ceres holds a portfolio primarily of publicly traded equity and debt securities in companies located in Canada, the United States of America and other countries. As at that date, the fair value of investments owned by Ceres totalled $143,956,433 and the cost thereof was $145,789,735 (March 31, 2009: portfolio of publicly traded equity securities having an aggregate fair value of $80,874,373 and an aggregate cost of $100,970,612). As at that date, the fair value of the Corporation's investment in securities of private companies represented 0.87% (March 31, 2009: 1.48%) of its total assets, and is not significant to its overall financial position.
As at December 31, 2009, the Corporation is liable to cover its short position on selected publicly traded equity securities. As at that date, the liability at fair value to cover short sales is $27,127,469, which includes an unrealized loss on short sales of $2,406,563 (March 31, 2009: fair value of liability was $14,828,063, including an unrealized loss of $1,457,940).
As at December 31, 2009, the Corporation had unearned premiums on written options. As at that date, the fair value of the unearned options was $113,602, which is net of an unrealized gain on the unearned premiums on written options in the amount of $106,557 (March 31, 2009: $362,292, net of an unrealized gain of $93,812).
As at December 31, 2009 and March 31, 2009, Ceres owned investments primarily in debt and equity securities of publicly traded issuers, in the following agricultural industry sub-sectors:
| (at fair values) | Dec. 31, 2009 | March 31, 2009 | ||
| Fertilizers | $ | 49,317,888 | $ | 27,571,949 |
| Agricultural commodity handlers and processors | 33,835,143 | 10,432,554 | ||
| Food manufacturing and retailing | 25,613,582 | 10,470,188 | ||
| Equipment manufacturers and distributors | 14,637,662 | 18,974,941 | ||
| Chemicals | 8,290,204 | 5,700,716 | ||
| Seed technology | 6,476,607 | 5,566,956 | ||
| Miscellaneous | 5,785,347 | 2,157,069 | ||
| $ | 143,956,433 | $ | 80,874,373 | |
Investments sold short are in equity securities of publicly-traded issuers, in the following agricultural industry sub-sectors:
| (at fair values) | Dec. 31, 2009 | March 31, 2009 | ||||
| Fertilizers | $ | (9,292,940 | ) | $ | (7,019,907 | ) |
| Food manufacturing and retailing | (5,958,258 | ) | (2,567,872 | ) | ||
| Agricultural commodity handlers and processors | (3,435,231 | ) | (1,050,204 | ) | ||
| Chemicals | (3,317,410 | ) | (1,705,353 | ) | ||
| Miscellaneous | (2,776,512 | ) | (1,242,099 | ) | ||
| Equipment manufacturers and distributors | (2,347,118 | ) | (1,242,628 | ) | ||
| $ | (27,127,469 | ) | $ | (14,828,063 | ) | |
Unearned options premiums on written call and put options for publicly traded companies are in the following agricultural industry sub-sectors:
| (at fair values) | Dec. 31, 2009 | March 31, 2009 | |||||
| Fertilizers | $ | (59,123 | ) | $ | (183,981 | ) | |
| Chemicals | (24,591 | ) | (20,793 | ) | |||
| Miscellaneous | (15,500 | ) | - | ||||
| Seed technology | (6,278 | ) | (42,845 | ) | |||
| Agricultural commodity handlers and processors | (5,755 | ) | (68,048 | ) | |||
| Equipment manufacturers and distributors | (1,570 | ) | (46,625 | ) | |||
| Food manufacturing and retailing | (785 | ) | - | ||||
| $ | (113,602 | ) | $ | (362,292 | ) | ||
As at December 31, 2009, the Corporation's investment in private companies represented 0.87% (March 31, 2009: 1.48%) of total assets.
As at December 31, 2009, the top-ten holdings of the Corporation, ranked by fair value, are:
| Name of investee | Fair value | |
| Potash Corporation of Saskatchewan Inc. | $ | 9,165,658 |
| Agrium Inc. | 5,038,318 | |
| Hanfeng Evergreen Inc. | 4,291,841 | |
| Bunge Limited | 4,181,037 | |
| FMC Corporation | 3,938,512 | |
| Sociedad Quimica y Minera de Chile | 3,928,258 | |
| Cosan Limited | 3,773,754 | |
| Wilmar International Limited | 3,609,182 | |
| The Andersons Inc. | 3,377,318 | |
| Archer Daniels Midland Company | 3,372,880 | |
| $ | 44,676,757 |
As at December 31, 2009, the fair values of the top-ten holdings of the Corporation, ranked by agricultural industry sub-sectors, are:
| Fair Value | ||
| Fertilizers | $ | 22,424,074 |
| Agricultural commodity handlers and processors | 14,540,417 | |
| Chemicals | 3,938,512 | |
| Miscellaneous | 3,773,754 | |
| $ | 44,676,757 |
| As at March 31, 2009, the top-ten holdings ranked by fair value are: | ||
| Name of investee | Fair value | |
| AG Growth Income Fund | $ | 11,169,768 |
| Potash Corporation of Saskatchewan Inc. | 5,181,405 | |
| Hemisphere GPS Inc. | 4,263,673 | |
| FMC Corporation | 3,811,947 | |
| Hanfeng Evergreen Inc. | 3,762,074 | |
| The Mosaic Company | 3,738,330 | |
| Terra Industries Inc. | 3,621,159 | |
| CF Industries Holdings Inc. | 3,331,533 | |
| Saputo Inc. | 3,292,045 | |
| Monsanto Company | 2,427,703 | |
| $ | 44,599,637 | |
As at March 31, 2009, the fair values of the top-ten holdings of the Corporation, ranked by agricultural industry sub-sectors, are:
| Fair Value | ||
| Fertilizers | $ | 19,634,501 |
| Equipment manufacturers and distributors | 15,433,441 | |
| Chemicals | 3,811,947 | |
| Food manufacturing and retailing | 3,292,045 | |
| Seed technology | 2,427,703 | |
| $ | 44,599,637 |
The Corporation's public portfolio continued the positive performance reported in the previous two quarters despite, from a price perspective, agriculture investments and related soft commodities experiencing relatively flat-to-declining performance in the third quarter that was a continuation of performance in the first six months. However, one exception to this was the performance of the fertilizer stocks in the third quarter, which seemed to be influenced by new concerns about future food shortages and a market perception that a price floor was reached in the Potash sector. The portfolio benefited from a move to more fertilizer companies towards the end of this quarter.
We believe that many agricultural commodities have reached a price floor. We expect the price of those commodities to trend upwards as 2010 progresses and play catch up with the broader commodity moves. We reiterate our comments from the previous quarter that we see certain events taking place that support a rise in global prices going forward. In particular, lower 2009 application of fertilizers and weather events in India caused a domino effect worldwide in future planting decisions, and will influence all soft commodities globally, going forward. The effects of these events (and others) were highlighted at the Food and Agriculture Organization of the United Nations summit in Rome, Italy, which has raised the profile of food supply and security issues.
Ceres management continues to analyze larger investment opportunities in both public and private companies consistent with the strategy outlined in Ceres' IPO, to determine whether they represent better long-term opportunities for capital appreciation compared to the current portfolio of publicly traded investments. Primary focus is on opportunities in agriculture infrastructure along with turnaround opportunities. With respect to the current public portfolio, it has been positioned to take advantage of a rise in soft commodities, while concurrently maintaining its option writing and shorting strategies to soften any unforeseen market corrections.
CERES GLOBAL AG CORP.
Summary Interim Statements of Income and Deficit
For the three-month period and nine-month period ended December 31, 2009
(with comparative figures for the three-month period and nine-month period ended December 31, 2008) (Unaudited)
| 3 months ended | 9 months ended | 3 months ended | 9 months ended | ||||||
| Dec. 31, 2009 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2008 | ||||||
| Dividend, interest and other revenues | $ | 1,235,665 | $ | 2,817,039 | $ | 759,353 | $ | 2,039,938 | |
| Operating expenses | 1,228,869 | 3,354,622 | 866,555 | 3,528,274 | |||||
| Income (loss) from operations | 6,796 | (537,583) | (107,202) | (1,488,336) | |||||
| Realized gain (loss) on sale of investments | 4,067,647 | 3,675,955 | (21,426,881) | (13,735,089) | |||||
| Realized gain (loss) on currency hedging transactions | 1,760,232 | 6,797,078 | (7,822,356) | (9,826,032) | |||||
| Realized and unrealized gain (loss) on foreign exchange | 115,846 | (1,048,358) | 2,888,427 | 2,664,758 | |||||
| Change in unrealized gain (loss) on investments | 2,151,507 | 19,182,229 | (3,053,068) | (34,212,869) | |||||
| Income (loss) before income taxes | 8,102,028 | 28,069,321 | (29,521,080) | (56,597,568) | |||||
| Income taxes | |||||||||
| Provision for (recovery of) current income taxes | - | - | (397,407) | 123,655 | |||||
| Provision for (recovery of) future income taxes | - | - | 397,407 | (123,655) | |||||
| - | - | - | - | ||||||
| Net income (loss) for the period | 8,102,028 | 28,069,321 | (29,521,080) | (56,597,568) | |||||
| Deficit, beginning of period | (28,607,298) | (48,574,591) | (32,672,273) | (5,595,785) | |||||
| Deficit, end of period | $ | (20,505,270) | $ | (20,505,270) | $ | (62,193,353) | $ | (62,193,353) | |
| Earnings (loss) per share | |||||||||
| Basic | $ | 0.65 | $ | 2.20 | $ | (2.29) | $ | (4.39) | |
| Fully diluted | $ | 0.65 | $ | 2.20 | $ | (2.29) | $ | (4.39) | |
For the nine-month period ended December 31, 2009, operating expenses totalled $3,354,622 (nine-month period ended December 31, 2008: operating expenses totalled $3,528,274). Of that amount, management fees totalled $1,765,026 (2008: $2,044,741), portfolio transaction costs totalled $576,427 (2008: $647,861), and general and administrative expenses totalled $375,334 (2008: $424,970).
For the quarter ended December 31, 2009, operating expenses totalled $1,228,869 (quarter ended December 31, 2008: $866,553). Of that amount, management fees totalled $622,993 (2008: $441,628), portfolio transaction costs totalled $188,827 (2008: $203,571), and general and administrative expenses totalled $151,414 (2008: $96,347).
CERES GLOBAL AG CORP.
Summary Balance Sheet
As at December 31, 2009 and March 31, 2009
| Dec. 31, 2009 | March 31, 2009 | ||||
| ASSETS | (unaudited) | (audited) | |||
| Cash | $ | 4,483,365 | $ | 14,233,183 | |
| Investments owned, at fair value | 143,956,433 | 80,874,373 | |||
| Unrealized gain on forward foreign exchange contracts | 195,622 | 397,957 | |||
| Dividends and interest receivable, and due from broker | 539,401 | 19,480,815 | |||
| Income taxes recoverable | 28,236 | 43,568 | |||
| Prepaid expenses | - | 22,425 | |||
| TOTAL ASSETS | $ | 149,203,057 | $ | 115,052,321 | |
| LIABILITIES | |||||
| Accounts payable, accruals and provisions | $ | 539,993 | $ | 387,108 | |
| Due to broker | 55,786 | 1,884,870 | |||
| Unearned premium on written options, at fair value | 113,602 | 362,292 | |||
| Unrealized loss on forward foreign exchange contracts | 37,966 | 1,953,876 | |||
| Investments sold short, at fair value | 27,127,469 | 14,828,063 | |||
| TOTAL LIABILITIES | 27,874,816 | 19,416,209 | |||
| SHAREHOLDERS' EQUITY | |||||
| Common shares | 130,715,107 | 135,197,540 | |||
| Warrants | 9,026,038 | 9,013,163 | |||
| Contributed surplus | 2,092,366 | - | |||
| Deficit | (20,505,270) | (48,574,591) | |||
| TOTAL SHAREHOLDERS' EQUITY | 121,328,241 | 95,636,112 | |||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 149,203,057 | $ | 115,052,321 | |
Ceres is an investment company. Its investments in debt and equity securities are classified as held-for-trading, and measured and reported at fair value with unrealized gains or losses recognized in operations for the period.
Under the terms and conditions of a normal course issuer bid, during the quarter ended December 31, 2009, Ceres repurchased 245,300 shares under this normal course issuer bid, for a cost of $1,550,041 (quarter ended September 30, 2009: 164,600 Shares were repurchased at a cost of $950,804, and quarter ended June 30, 2009: 13,315 Shares were repurchased at a cost of $82,343). The stated capital value of the repurchased Shares during the nine-month period ended December 31, 2009 was $4,675,553. The excess of the stated capital value of the repurchased Shares over the cost of repurchasing the Shares, being $2,096,366, has been recognized as Contributed Surplus and is included in Shareholders' Equity on the balance sheet as at December 31, 2009.
This news release contains forward-looking statements concerning the Corporation's business and operations. The Corporation cautions that, by their nature, forward-looking statements involve risks and uncertainty and the Corporation's future actual results could vary materially from those expressed or implied in such statements. Reference should be made to the Corporation's annual audited financial statements, its management discussion and analysis, or the initial public offering prospectus dated December 13, 2007 for a description of the major risk factors.
Ceres Global Ag Corp.
Jason Gould
Chief Financial Officer
(416) 915-2426
