Legumex Walker Posts Q4 Loss

TORONTO - Mar 20/13 - SNS -- Legumex Walker Inc. declared a net loss of CDN $5.4 million on sales of $104 million for the fourth quarter ending December 31, compared to net earnings of $1.9 million on sales of $62.4 million during the same three month period in 2011.

This pushed the loss for the 2012 fiscal year to $12.6 million on sales of $294.8 million. There are no comparable figures for the previous fiscal year.

In reporting the fiscal year results, the company said profits in its special crops division were offset by loses in its oilseed division, which was not yet in full operation.

During the year, Legumex Walker acquired Manitoba-based Keystone Grain Ltd. and KGL Transport Ltd., one of the largest sunflower and birdfood processors in North America, which added 63,000 metric tons (MT) of capacity to the company.

It also reorganized its Special Crops business into three operating divisions: the Edible Bean Division; the Sunflower, Flax and Birdfood Division; and the Pea, Lentil and Canaryseed Division.

Construction on the PCC plant was largely completed in December 2012 and key components of the plant were placed in service. The Company commenced production, crushed over 900 MT of canola seed and sold and shipped super-degummed oil and canola meal prior to December 31, 2012.

Joel Horn, President and Chief Executive Officer, said, "In the fourth quarter, while we saw overall volumes improve, profitability was impacted by low commodity margins particularly on edible beans, the result of a confluence of factors, including bean inventory and contractual obligations attached to the St. Hilaire acquisition and compounded by a sharp decline in prices late in the year, as well as a dry crop and cold weather, both of which impacted the quality of our product. The diversification of our products, sourcing and processing should minimize the impact that such factors have on our overall business going forward.

"We entered 2012 with eight processing facilities and approximately 300,000 MT of capacity, about 80% of which was concentrated in our Lentil and Pea Division. We ended the year with 15 facilities and approximately 875,000 MT of processing capacity that is over 40% Canola and less than 30% Lentils and Peas," Horn said.

"Adding these additional products increases our diversification into higher margin products. For example, average 2012 commodity margins from our Pea, Lentil and Canaryseed Division were $68 MT while average margins from our Edible Bean and Sunflower, Flax and Birdfood Divisions were $134 MT and $125 MT, respectively."