Ceres Global Ag Corp.
TSX : CRP

Ceres Global Ag Corp.

May 27, 2009 16:05 ET

Ceres Global Ag Corp. Announces Results for the Year and Fiscal Quarter Ended March 31, 2009

TORONTO, ONTARIO--(Marketwire - May 27, 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. ("Ceres" or the "Corporation") (TSX:CRP) is announcing its results for the year and fiscal quarter ended March 31, 2009.

The performance of the public market portfolio improved in the fourth quarter of this fiscal year. As at March 31, 2009, the net asset value attributable to each outstanding Common Share and related Warrant was $7.42, compared to $6.36 as at December 31, 2008, $8.65 as at September 30, 2008, $12.71 as at June 30, 2008 and $10.75 as at March 31, 2008. The net asset value as at March 31, 2009 represents an increase of 16.67% for the quarter ended March 31, 2009 and a decrease of 30.98% for the year ended March 31, 2009. While the fundamentals for the agricultural sector remained positive, the global financial crisis has continued to negatively affect publicly traded stocks.

For the year ended March 31, 2009, Ceres reported a net loss of $42,978,806, which included an unrealized loss on investments of $19,197,966. For the quarter ended March 31, 2009, Ceres reported net income of $13,618,762, which included an unrealized gain on investments of $16,224,715 (quarter ended March 31, 2008: net loss of $8,107,020, including an unrealized loss on investments of $6,906,436 for the quarter). For the year ended March 31, 2009, basic and fully diluted loss per share was $3.33 (five-month period ended March 31, 2008: basic and fully diluted loss per share of $0.65). For the quarter ended March 31, 2009, basic and fully diluted earnings per share per share was $1.06 (quarter ended March 31, 2008: basic and fully diluted loss per share was $0.63).

For the year ended March 31, 2009, Ceres earned dividend, interest and other investment revenue totalling $2,540,541 (five-month period ended March 31, 2008: $805,738). For the quarter ended March 31, 2009, dividend, interest and other investment revenue totalled $500,603 (quarter ended March 31, 2008: $790,149).

Ceres invests primarily in securities of publicly traded companies located in Canada, the United States of America and other countries. As at March 31, 2009, the fair value of all investments owned by Ceres totalled $80,874,373 and the cost thereof was $100,970,612 (March 31, 2008: fair value of $128,313,181 and cost of $130,573,721). As at March 31, 2009, Ceres is liable to cover investments sold short, having a fair value of $14,828,063, for which it received proceeds of $13,370,123 (March 31, 2008: fair value of $3,033,869 and for which it received proceeds of $2,859,407). As at March 31, 2009, Ceres has unearned options premiums on written call and put options for publicly traded companies, having a fair value of $362,292, for which it received premiums of $456,104 (March 31, 2008: $nil).

As at March 31, 2009 and 2008, Ceres owned investments primarily in equity securities of publicly traded companies, in the following agricultural industry sub-sectors:



(at fair values) March 31, 2009 March 31, 2008
------------------------------

Fertilizers $ 27,571,949 $ 53,171,080
Equipment manufacturers and distributors 18,974,941 23,864,446
Food manufacturing and retailing 10,470,188 2,487,532
Agricultural commodity handlers
and processors 10,432,554 16,186,108
Chemicals 5,700,716 16,061,683
Seed technology 5,566,956 11,246,438
Miscellaneous 2,157,069 5,295,894
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$ 80,874,373 $ 128,313,181
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Investments sold short are in equity securities of publicly traded
companies, in the following agricultural industry sub-sectors:


(at fair values) March 31, 2009 March 31, 2008
------------------------------

Fertilizers $ (7,019,907) $ -
Food manufacturing and retailing (2,567,872) (1,129,500)
Chemicals (1,705,353) -
Equipment manufacturers and distributors (1,242,628) -
Miscellaneous (1,242,099) (1,904,369)
Agricultural commodity handlers
and processors (1,050,204) -
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$ (14,828,063) $ (3,033,869)
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Unearned options premiums on written call and put options for publicly
traded companies are in the following agricultural industry sub-sectors:


(at fair values) March 31, 2009 March 31, 2008
-------------------------------
Fertilizers $ (183,981) $ -
Agricultural commodity handlers
and processors (68,048) -
Equipment manufacturers and distributors (46,625) -
Seed technology (42,845) -
Chemicals (20,793) -
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$ (362,292) $ -
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As at March 31, 2009, non-publicly traded securities, including securities
of private companies, warrants and restricted securities, represent 2.14%
(March 31, 2008: 7.56%) of the fair value of the investments owned.

As at March 31, 2009, the top-ten holdings ranked by fair value are:


Name of investee Fair value
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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
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$ 44,599,637
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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
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$ 44,599,637
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As at March 31, 2008, the top-ten holdings ranked by fair value were:

Name of investee Fair value
----------------------------------------------------------------------------
Potash One Inc. $ 8,605,185
Potash Corporation of Saskatchewan Inc. 7,572,768
Agrium Inc. 6,989,855
Hanfeng Evergreen Inc. 6,748,123
Hemisphere GPS Inc. 5,951,675
AG Growth Income Fund 5,698,785
Cervus LP 3,969,795
The Mosaic Company 3,902,029
The Andersons Inc. 3,858,086
Viterra Inc. 3,742,608
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$ 57,038,909
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As at March 31, 2008, the fair values of the top-ten holdings of the
Corporation, ranked by agricultural industry sub-sectors, were:


Fair Value
----------
Fertilizers $ 32,779,780
Equipment manufacturers and distributors 16,658,435
Agricultural commodity handlers and processors 7,600,694
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$ 57,038,909
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This past year of operations, the first full year of operations for the Corporation, represented an extremely challenging time to be investing in capital markets. The credit crisis linked with a loss of confidence worldwide drove market valuations down significantly and even a sector such as Agriculture, with strong fundamentals, was not spared.

Despite solid fundamentals that included strong world demand for agricultural commodities, some of the highest levels ever seen for farm incomes in North America and strong balance sheets for North American farmers, the Agriculture sector faced a high degree of volatility as the de-leveraging of commodities took place. With this macro-economic view in place but tempered by the malaise for the overall world economy, the Corporation has altered its investment strategy to focus on the following themes:

- Focus on investments in companies with strong balance sheets and industry fundamentals and, if available, paying an attractive return.

- As market conditions warrant, invest in market volatility by participating in option writing. This strategy generated income from premiums on expired options and from gains from written call options exercised totalling $1.5M in Q3 and $2.4M in Q4.

- Target oversold Agricultural sub-sectors we expect will be re-priced and may potentially benefit from M&A activity. This strategy is best exemplified by our move into the nitrogen fertilizer space in December 2008, a strategy that drove strong returns in the 4th quarter from improved perception by investors and M&A.

The result of this revised strategy within the Agriculture sector was an improvement of 16.67% in the NAV of the Corporation for the 4th quarter ended March 31, 2009, versus negative performances of (2.97%) for the TSX index and (13.30%) for the Dow Jones Industrial Average.

Despite our optimism for the Agriculture sector, management recognizes that current general market conditions are extremely volatile and will likely continue to be so in the near term. Therefore, management will continue to assess, evaluate and modify investment strategies more quickly than what were expected when the Corporation was founded.



CERES GLOBAL AG CORP.

Summary Statement of Operations and Deficit
For the three-month period and year ended March 31, 2009
(with comparative figures for the three-month period and five-month period
ended March 31, 2008)
(Unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Quarter ended Year ended Quarter ended 5 months ended
Mar. 31, 2009 Mar. 31, 2009 Mar. 31, 2008 Mar. 31, 2008
------------- ------------- ------------- ---------------
Dividend,
interest
and other
revenues $ 500,603 $ 2,540,541 $ 790,149 $ 805,709

Operating
expenses 815,795 4,344,069 826,083 1,592,721
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Loss from
operations (315,192) (1,803,528) (35,934) (787,012)

Realized loss
on sale of
investments (2,617,938) (16,353,027) (931,461) (931,461)

Realized gain
(loss) on
currency
hedging
transactions 1,808,809 (8,017,223) 189,068 189,068

Realized and
unrealized
gain (loss)
on foreign
exchange (1,481,632) 2,392,938 (422,257) (470,854)

Change in
unrealized
gain (loss)
on investments 16,224,715 (19,197,966) (6,906,436) (3,595,526)
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Net income
(loss) for
the period 13,618,762 (42,978,806) (8,107,020) (5,595,785)

Retained
earnings
(deficit),
beginning of
period (62,193,353) (5,595,785) 2,511,235 -
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Retained
earnings
(deficit),
end of
period $ (48,574,591) $ (48,574,591) $ (5,595,785) $ (5,595,785)
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Earnings
(loss)
per share

Basic $ 1.06 $ (3.33) $ (0.63) $ (0.65)
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Fully
diluted $ 1.06 $ (3.33) $ (0.63) $ (0.65)
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For the year ended March 31, 2009, operating expenses (including portfolio transaction costs) totalled $4,344,069 (five-month period ended March 31, 2008: $1,592,721). For the year ended March 31, 2009, management fees totalled $2,524,911 (five-month period ended March 31, 2008: $793,501). For the year ended March 31, 2009, portfolio transaction costs totalled $835,441 (five-month period ended March 31, 2008: $440,827). For the year ended March 31, 2009, general and administrative expenses (which includes marketing, filing fees, printing and mailing, insurance and accounting/back-office expenses) totalled $453,431 (five-month period ended March 31, 2008: $185,429).

For the quarter ended March 31, 2009, operating expenses totalled $815,795 (quarter ended March 31, 2008: $826,083). For the quarter ended March 31, 2009, management fees totalled $480,170 (quarter ended March 31, 2008: $738,882). For the quarter ended March 31, 2009, portfolio transaction costs totalled $187,581 (quarter ended March 31, 2008: $404,968). For the quarter ended March 31, 2009, general and administrative expenses (which includes marketing, filing fees, printing and mailing, insurance and accounting/back-office expenses) totalled $28,460 (quarter ended March 31, 2008: $147,399).



CERES GLOBAL AG CORP.
Summary Balance Sheet
As at March 31, 2009 and March 31, 2008

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March 31, 2009 March 31, 2008
-------------- ---------------
ASSETS
Cash $ 14,233,183 $ 18,631,601
Investments owned, at fair value 80,874,373 128,313,181
Unrealized gain on forward foreign
exchange contracts 397,957 -
Dividends receivable and due from
broker 19,480,815 367,164
Income taxes recoverable 43,568 -
Prepaid expenses 22,425 -
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TOTAL ASSETS $ 115,052,321 $ 147,311,946
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LIABILITIES
Accounts payable, accruals and
provisions $ 2,271,978 $ 4,496,965
Unearned premium on written options 362,292 -
Unrealized loss on forward foreign
exchange contracts 1,953,876 1,166,194
Investments sold short, at fair value 14,828,063 3,033,869
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TOTAL LIABILITIES 19,416,209 8,697,028
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SHAREHOLDERS' EQUITY
Common shares 135,197,540 135,197,540
Warrants 9,013,163 9,013,163
Deficit (48,574,591) (5,595,785)
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TOTAL SHAREHOLDERS' EQUITY 95,636,112 138,614,918
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TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 115,052,321 $ 147,311,946
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Ceres is an investment company. Its investments in equity securities are 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