Ceres Global Ag Corp.
TSX : CRP
TSX : CRP.WT

Ceres Global Ag Corp.

November 04, 2009 16:56 ET

Ceres Global Ag Corp. Announces Results for the Fiscal Quarter and Six-Month Period Ended September 30, 2009

TORONTO, ONTARIO--(Marketwire - Nov. 4, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES OF AMERICA

The management of Ceres Global Ag Corp. (TSX:CRP)(TSX:CRP.WT) ("Ceres" or the "Corporation") is announcing its results for the fiscal quarter and six-month period ended September 30, 2009.

The performance of the public market portfolio continued to improve during the first quarter of the fiscal year ending March 31, 2010 ("Q2 2010"). As at September 30, 2009, the net asset value attributable to each outstanding Common Share and related Warrant was $9.02, compared to the following values as at the following dates:



June 30, 2009: $ 8.26
March 31, 2009: $ 7.42
December 31, 2008: $ 6.36
September 30, 2008: $ 8.65


The net asset value as at September 30, 2009 represents an increase of 9.2% for the quarter then ended.

For the six-month period ended September 30, 2009, Ceres reported net income of $19,967,293, which included an unrealized gain on investments in the amount of $17,030,722 (six-month period ended September 30, 2008: net loss of $27,076,488, including an unrealized loss on investments of $31,159,802). For the quarter ended September 30, 2009, Ceres reported net income of $9,374,550, which included an unrealized gain on investments of $6,624,517 (quarter ended September 30, 2008: net loss of $52,356,593, which included an unrealized loss on investments of $57,800,205). For the six-month period ended September 30, 2009, basic and diluted earnings per share were $1.55 (six-month period ended September 30, 2008: basic and diluted loss per share was $2.10). For the quarter ended September 30, 2009, basic and diluted earnings per share was $0.73 (quarter ended September 30, 2008: basic and diluted loss per share was $4.06).

For the six-month period ended September 30, 2009, Ceres earned dividend, interest and other revenues totalling $1,581,374 (six-month period ended September 30, 2008: dividend, interest and other revenues totalled $1,280,587). For the quarter ended September 30, 2009, dividend, interest and other revenues totalled $825,797 (quarter ended September 30, 2008: dividends, interest and other revenues totalled $605,652).

Ceres invests primarily in securities of publicly traded companies located in Canada, the United States of America and other countries. As at September 30, 2009, the fair value of investments owned by Ceres totalled $135,165,842 and the cost thereof was $141,342,419 (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 Corporation's investment in securities of private companies represented 0.65% (March 31, 2009: 1.48%) of its total assets, and is not significant to its overall financial position.

As at September 30, 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 $25,178,101, which includes an unrealized loss on short sales of $625,126 (March 31, 2009: fair value of liability was $14,828,063, including an unrealized loss of $1,457,940).

As at September 30, 2009, the Corporation had unearned premiums on written options. As at that date, the fair value of the unearned options was $456,852, which is net of an unrealized gain onthe unearned premiums on written options in the amount of $95,101 (March 31, 2009: $362,292, net of an unrealized gain of $93,812).

As at September 30, 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) Sept. 30, 2009 March 31, 2009
--------------------------------

Fertilizers $ 44,298,401 $ 27,571,949
Food manufacturing and retailing 27,718,912 10,470,188
Agricultural commodity handlers and
processors 24,266,157 10,432,554
Equipment manufacturers and distributors 16,788,532 18,974,941
Miscellaneous 14,633,236 2,157,069
Seed technology 4,517,783 5,566,956
Chemicals 2,942,821 5,700,716
--------------------------------------------------------------------------
$ 135,165,842 $ 80,874,373
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Investments sold short are in equity securities of publicly-traded issuers, in the following agricultural industry sub-sectors:



(at fair values) Sept. 30, 2009 March 31, 2009
--------------------------------

Fertilizers $ (8,723,396) $ (7,019,907)
Food manufacturing and retailing (7,001,561) (2,567,872)
Equipment manufacturers and distributors (3,278,310) (1,242,628)
Chemicals (3,215,729) (1,705,353)
Miscellaneous (2,489,577) (1,242,099)
Agricultural commodity handlers and
processors (469,528) (1,050,204)
--------------------------------------------------------------------------
$ (25,178,101) $ (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) Sept. 30, 2009 March 31, 2009
--------------------------------
Fertilizers $ (156,242) $ (183,981)
Food manufacturing and retailing (68,828) -
Equipment manufacturers and distributors (58,919) (46,625)
Agricultural commodity handlers and
processors (53,027) (68,048)
Chemicals (48,206) (20,793)
Seed technology (40,171) (42,845)
Miscellaneous (31,459) -
--------------------------------------------------------------------------
$ (456,852) $ (362,292)
--------------------------------------------------------------------------
--------------------------------------------------------------------------


As at September 30, 2009, the Corporation's investment in private companies represented 0.65% (March 31, 2009: 1.48%) of total assets.

As at September 30, 2009, the top-ten holdings of the Corporation, ranked by fair value, are:



Name of investee Fair value
-----------------------------------------------------------------
Potash Corporation of Saskatchewan Inc. $ 7,775,266
AG Growth International Incorporated 5,592,616
CF Industries Holdings Inc. 4,364,672
FMC Corporation 4,363,250
Terra Industries Inc. 4,166,032
Agrium Inc. 3,889,179
Compass Minerals International Inc. 3,630,569
Bunge Limited 3,525,474
Hemisphere GPS Inc. 3,500,365
The Mosaic Company 3,385,843
-----------------------------------------------------------------
$ 44,193,266
-----------------------------------------------------------------
-----------------------------------------------------------------


As at September 30, 2009, the fair values of the top-ten holdings of the Corporation, ranked by agricultural industry sub-sectors, are:



Fair Value
-------------------------
Fertilizers $ 27,211,561
Equipment manufacturers and distributors 9,092,981
Miscellaneous 4,363,250
Agricultural commodity handlers and
processors 3,525,474
-----------------------------------------------------------------
$ 44,193,266
-----------------------------------------------------------------
-----------------------------------------------------------------


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 to perform well in the quarter despite agriculture stocks and commodities, in general, not participating in the overall market recovery to the same extent. The Corporation's active management strategies with investments in selected companies in both equity and fixed income securities coupled with an option writing strategy have contributed to this strong relative performance.

We believe a floor has been reached with many agricultural commodities, and we expect them to begin to trend up towards the end of 2009 and into 2010, and play catch up with the broader commodity moves. In general, we see certain events taking place that support a rise in global prices going forward. In particular, we have seen farmers in the USA skip the applications for potash, and to a lesser extent phosphate, so the record yields could reverse quickly as the water retention in soils deteriorate. In addition, from a more global perspective, the drought in India, which has affected sugar production, could cause a domino effect worldwide in future planting decisions, and influence all soft commodities globally.

The Ceres portfolio is repositioning itself to take advantage of floors in commodity prices and positive movements in stocks in the third and fourth quarters of the current year. At the same time, the portfolio is also maintaining its option writing and shorting strategies to soften any unforeseen market corrections. We will continue to analyse and investigate for early signs of recovery so that the portfolio may be positioned to benefit. In addition, we continue to look for attractive acquisitions in private equity and make appropriate moves as opportunities arise.



CERES GLOBAL AG CORP.
Summary Interim Statements of Income and Deficit
For the three-month period and six-month period ended September 30, 2009
(with comparative figures for the three-month period and six-month period
ended September 30, 2008)
(Unaudited)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
6 months 3 months 6 months
3 months ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2009 2008 2008
-------------- ------------ ------------ -------------
Dividend, interest
and other
revenues $ 825,797$ 1,581,374 $ 605,652 $ 1,280,587
Operating
expenses
(recovered) 1,100,866 2,125,753 (5,260,615) 2,661,720
---------------------------------------------------------------------------
Income (loss)
from
operations (275,069) (544,379) 5,866,267 (1,381,133)
Realized gain
(loss)
on sale of
investments 2,405,530 (391,691) 615,630 7,691,792
Realized gain
(loss) on
currency hedging
transactions 733,729 5,036,845 (999,130) (2,003,676)
Realized and
unrealized loss
on foreign exchange (114,157) (1,164,204) (39,155) (223,669)
Change in unrealized
gain (loss) on
investments 6,624,517 17,030,722 (57,800,205) (31,159,802)
---------------------------------------------------------------------------
Income (loss)
before income
taxes 9,374,550 19,967,293 (52,356,593) (27,076,488)
---------------------------------------------------------------------------
Income taxes
Provision for
current income
taxes - - 126,684 521,062
Provision for
recovery of future
income taxes - - (126,684) (521,062)
---------------------------------------------------------------------------
- - - -
---------------------------------------------------------------------------
Net income (loss)
for the period 9,374,550 19,967,293 (52,356,593) (27,076,488)
(Deficit) retained
earnings,
beginning
of period (37,981,848) (48,574,591) 19,684,320) (5,595,785)
---------------------------------------------------------------------------
Deficit, end of
period $(28,607,298) $(28,607,298) $(32,672,273) $(32,672,273)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Earnings (loss)
per share
Basic $ 0.73 $ 1.55 $ (4.06) $ (2.10)
---------------------------------------------------------------------------
Fully diluted $ 0.73 $ 1.55 $ (4.06) $ (2.10)
---------------------------------------------------------------------------


For the six-month period ended September 30, 2009, operating expenses totalled $2,125,753 (six-month period ended September 30, 2008: operating expenses totalled $2,661,720). Of that amount, management fees totalled $1,142,033 (2008: $1,603,113), portfolio transaction costs totalled $387,599 (2008: $444,290), and general and administrative expenses totalled $223,920 (2008: $328,624).

For the quarter ended September 30, 2009, operating expenses totalled $1,100,866 (2008: operating expenses, before the reversal of the incentive fee in the amount of $6,594,437 accrued in the quarter ended June 30, 2008, totalled $1,333,822). Of that amount, management fees totalled $591,438 (2008: $746,603), portfolio transaction costs totalled $218,193 (2008: $222,396), and general and administrative expenses totalled $84,761 (2008: $154,623).

During the quarter ended September 30, 2008, the Corporation reported a recovery of operating expenses of $5,260,615, which reflected the reversal of a provision for an incentive fee expense of $6,594,437, which was recognized in the prior quarter. For the quarter ended September 30, 2009, no provision for an incentive fee has been recognized and no liability for an incentive fee is payable.



CERES GLOBAL AG CORP.
Summary Balance Sheet
As at September 30, 2009 and March 31, 2009

--------------------------------------------------------------------------
--------------------------------------------------------------------------
Sept. 30, 2009 March 31, 2009
--------------- ---------------
ASSETS (unaudited) (audited)
Cash $ 8,643,115 $ 14,233,183
Investments owned, at fair value 135,165,842 80,874,373
Unrealized gain on forward foreign
exchange contracts 800,262 397,957
Dividends and interest receivable, and
due from broker 594,430 19,480,815
Income taxes recoverable 10,455 43,568
Prepaid expenses - 22,425
--------------------------------------------------------------------------
TOTAL ASSETS $ 145,214,104 $ 115,052,321
--------------------------------------------------------------------------
--------------------------------------------------------------------------

LIABILITIES
Accounts payable, accruals and
provisions $ 416,935 $ 387,108
Due to broker 4,165,144 1,884,870
Unearned premium on written options, at
fair value 456,852 362,292
Unrealized loss on forward foreign
exchange contracts 220,819 1,953,876
Investments sold short, at fair value 25,178,101 14,828,063
--------------------------------------------------------------------------
TOTAL LIABILITIES 30,437,851 19,416,209
--------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Common shares 133,425,108 135,197,540
Warrants 9,026,038 9,013,163
Contributed surplus 932,405 -
Deficit (28,607,298) (48,574,591)
--------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 114,776,253 95,636,112
--------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 145,214,104 $ 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.

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.

Contact Information

  • Ceres Global Ag Corp.
    Jason Gould
    Chief Financial Officer
    (416) 915-2426