Dominion Citrus Income Fund

Dominion Citrus Income Fund

March 27, 2008 16:44 ET

Dominion Citrus Income Fund: Fiscal 2007 Report to Unitholders

TORONTO, ONTARIO--(Marketwire - March 27, 2008) - Dominion Citrus Income Fund ("Dominion", the "Fund")(TSX:DOM.UN) reports net earnings of $1,891,000 or $0.09 per unit for the year ended December 31, 2007 compared to a net loss of $93,000 or ($0.00) per unit for the same period in 2006, which included a fourth quarter goodwill impairment charge of $2,788,000.

In addition to the significant internal changes related to the execution of its strategy, the Company's "Produce" businesses were affected by the unprecedented appreciation of the Canadian dollar. When combined with generally lower commodity prices, revenues and margins were adversely affected. The profitability of the 'other food' businesses was negatively impacted by short crops for apples and maple syrup which resulted in significantly higher product costs that could not be completely recovered through selling price increases.

Investments in new products and market development personnel coupled with ramp up costs associated with the FreshFix™ ready to consume fruits and vegetables product lines further impacted 2007 earnings.

The marginal decline in fourth quarter revenue was driven by volume declines in the produce segment more than offsetting stronger demand at Delta Foods in the other food segment. Similarly, margins and earnings were adversely impacted by rising commodity costs in the quarter that could not be recovered via selling price increases.

The fourth quarter and year to date results are summarized below (all figures in $000's except per unit):

Three months ended Twelve months ended

Dec 31 Dec 31 Dec 31 Dec 31
2007 2006 2007 2006

Revenue $31,671 $31,817 $123,674 $117,335
Net earnings $303 ($1,763) $1,891 ($93)
Fully diluted earnings per unit $0.02 ($0.08) $0.09 ($0.00)
EBITDA $884 $1,593 $3,800 $4,020
Distributable cash $663 $1,260 $2,363 $3,033

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: modified its operational organization structure to drive revenue increases and better meet customer needs; expanded product and process development; increased its supplier base; and will continue to make selective investments in its processing facilities.

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

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.

Contact Information

  • Dominion Citrus Income Fund
    Investors: E. A. Atkinson
    VP Finance, CFO & Corporate Secretary
    (416) 242-8341
    Dominion Citrus Income Fund
    Media: J. L. Lavergne
    President & CEO
    (416) 242-8341