Agricore Reports $8 Million Loss

WINNIPEG - Jun 8/06 - SNS -- Agricore United reports a CDN $8 million loss of sales and revenue from services of $568.9 million during the second quarter ending April 30, compared to a loss of $4.4 million on sales of $640 million during the same three month period last year.

This lifted the company's loss for the first half of the current fiscal year to $28.6 million on sales of $1,114.2 million; compared to a loss of $22.8 million on sales of $1,188.1 million the first half of the previous fiscal year.

Despite continuing losses, the company managed an upbeat tone in its description of this year's results, noting it is experienced "a marked improvement in grain shipments for the six months ended April 30, 2006. The company shipped 10% more grain compared to the same period a year ago at a higher margin per metric ton (MT).

"The improvement in grain was offset by a decline in Crop Production Services (CPS) profits, due mainly to delayed sales driven by a later spring season, as well as margin pressures in certain product lines as producers responded to higher input costs, a stronger Canadian dollar and volatile commodity prices."

"While the timing of our CPS sales activity in the second quarter of 2006 has influenced our quarterly results, much of the decline in second quarter sales were recouped by the beginning of June," says Brian Hayward, Chief Executive Officer. "Additionally, our second quarter results do not yet reflect any significant sales activity for our crop protection products since typically more than 80% of these sales are only reflected later in our third quarter, coinciding with the timing of weed emergence.

"Recent industry reports indicate that production for 2006 will be strongly influenced by the excellent moisture conditions through most of the prairies and an anticipated strengthening of grain and oilseed prices," continues Hayward. "Strong demand from the biofuels market, combined with forecasted increases in exports should be favorable for producers and for the company."

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