Dominion Citrus Income Fund
TSX : DOM.UN

Dominion Citrus Income Fund

July 31, 2008 17:01 ET

Dominion Citrus: Second Quarter 2008 Report to Unitholders

Three months ended June 21, 2008 and June 23, 2007

TORONTO, ONTARIO--(Marketwire - July 31, 2008) - Dominion Citrus Income Fund ("Dominion", the "Fund") (TSX:DOM.UN) reports a net loss from continuing operations of $565,000 or ($0.03) per unit for the three months ended June 21, 2008 compared to earnings of $505,000 or $0.03 per unit for the same period in 2007. The net earnings from discontinued operations for the same periods were a net profit of $229,000 versus a net profit of $58,000 in 2007.

Second quarter revenue and margins from continuing operations continue to be negatively impacted by price deflation resulting from the Canadian dollar appreciation against its US counterpart year over year and lower prices for a number of commodities due to improved crops. These were compounded by the non-repeat of incremental offshore revenue opportunities achieved in 2007 due to some North American supply shortages. Margins were further impacted by fierce competition as industry participants struggled to offset the impact of deflationary pricing. Expenses increased by $385,000 over last year primarily due to cost increases for fuel, realty taxes and a reduction in storage revenue.

The quarterly results are summarized below (all figures in $000's except per unit):



Three months ended
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June 21 June 23
2008 2007
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Revenue, continuing operations $ 24,817 $ 28,771
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Net earnings,(Loss) continuing operations ($565) $505
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Net earnings, discontinued operations $229 $58
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Fully diluted earnings per unit, continuing operations ($0.03) $0.03
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Fully diluted earnings per unit, discontinued
operations $0.01 $0.00
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EBITDA, continuing operations ($688) $923
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EBITDA, discontinued operations $329 $121
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Distributable cash, continuing operations ($944) $696
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Distributable cash, discontinued operations $329 $121
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Six months ended
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June 21 June 23
2008 2007
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Revenue, continuing operations $ 47,657 $ 56,001
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Net earnings,(loss) continuing operations ($489) $1,459
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Net earnings, discontinued operations $126 $112
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Fully diluted earnings per unit, continuing operations ($0.03) $0.07
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Fully diluted earnings per unit, discontinued
operations $0.01 $0.00
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EBITDA, continuing operations ($500) $2,466
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EBITDA, discontinued operations $209 $234
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Distributable cash, continuing operations ($1,563) $1,756
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Distributable cash, discontinued operations $209 $229
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Fiscal 2008 Outlook

The highly competitive nature of the segments of the food industry in which the Fund participates will result in continuing volume and margin pressures. The year over year appreciation of the Canadian dollar as against the US dollar in 2007 combined with any further appreciation in 2008 will result in lower prices going forward, thereby unfavourably impacting the Fund's revenue and margins.

To counter these challenges the Fund has initiated the restructuring of its operations. Staff and operating cost reductions have begun. New revenue expansion programs are being developed, some of which will be introduced in the third quarter of 2008.

Dominion Citrus Income Fund ("Dominion Citrus") is evaluating the recent release of guidance from the Federal department of Finance regarding the re-organization of income trusts as corporations, and will advise unit holders accordingly when this evaluation is complete.

In addition, management of Dominion Citrus is taking steps to proceed with a formal evaluation of strategic alternatives for the Fund, including but not limited to the sale of the fund, a going private transaction, or the sale of all or some of the business units of the Fund. In this context, the board has commissioned and received a valuation of the Fund from an independent third party and has received and will receive proposals from third parties regarding both the review of strategic alternatives and the possible sale of all or a portion of the Fund's assets or operations.

Caution regarding Forward-Looking Statements

This release contains statements, which, to the extent that they are not a recitation of historical fact, may constitute "forward-looking statements". Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or performance, or our underlying assumptions. The words "estimate", "anticipate", "believe", "expect", "intend" or other similar expressions of future or conditional verbs such as "will", "should", "would" and "could" are intended to identify forward-looking statements. Persons reading this press release are cautioned that such statements are only expectations, and that our actual results or performance may be materially different.

Forward-looking information involves certain risks, assumptions, uncertainties and other factors which may cause actual future results to differ materially from those expressed or implied in any forward-looking statements.

Readers should not place undue reliance on these forward-looking statements when making decisions, and should consider the date onto which the statements were made. Except as required by applicable security law, management disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Dominion

The Fund is a publicly traded, unincorporated, open-ended limited purpose income trust. On January 1, 2006, all of the common shares of Dominion Citrus Limited ("DCL") were exchanged for trust units of the Fund. The trust units are listed on the TSX under the symbol DOM.UN. The Series A preference shares of DCL continue to be listed on the TSX under the symbol DMN.PR.A.

Dominion is a diversified food company supplying fresh produce, premium juices and maple syrup to a wide variety of customers in retail, foodservice and food distribution businesses. The Fund provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Quebec. The Fund also supplies products to customers in the United States and Europe. The website may be accessed at www.dominioncitrus.com.

Contact Information

  • Investors:
    Dominion Citrus Income Fund
    Winston R. Ash, Corporate Secretary
    (416) 242-8341
    or
    Media:
    Dominion Citrus Income Fund
    J. L. Lavergne, President & CEO
    (416) 242-8341
    Website: www.dominioncitrus.com