Winnipeg, MB, August 12, 2020 – Ag Growth International Inc. (TSX: AFN) (“AGI”, the “Company”, “we” or “our”) today announced its financial results for the three and six-months ended June 30, 2020.
Robust demand for AGI Farm products and a solid operational performance across all regions resulted in strong Q2 2020 adjusted EBITDA of $44.1 million, despite COVID-19 related headwinds.
Strength in Farm sales was broad-based across product categories and reflects the resilience of our business in the face of COVID-19, trade uncertainty and sustained lower crop prices.
AGI’s gross margin percentage increased compared to Q2 2019, despite numerous COVID-19 related production suspensions, due to strong Farm results, an improved operational performance internationally, particularly in Brazil, and the impact of recent strategic capital expenditures.
Our EBITDA margin in Q2 2020 of 16.9% represents an increase of 570 bps over Q1 2020 and is consistent with Q2 2019 (17.5%), despite the aforementioned challenges and a continued investment in AGI’s technology platform.
Adjusted EBITDA in Q2 2020, excluding the AGI SureTrack platform, was $45.9 million or 17.8% of trade sales (Q2 2019 – 17.3%).
Adjusted profit and adjusted profit per share decreased compared to Q2 2019, while the impact of non-cash gains on foreign exchange translation and the Company’s equity compensation swap resulted in an increase in profit and profit per share compared to Q2 2019.
“The resilience of our business was demonstrated in the second quarter with strong results in our Farm business and relatively stable performance across AGI despite the significant headwinds created by COVID.”, said Tim Close, President and CEO of AGI.
“We have been pushing hard over the last number of years to diversify our business from a geographic and end market basis to decrease regional exposure and align our business more closely with global food supply infrastructure build and maintenance.
"Our historical, and in particular our performance in 2020, continues to highlight the resilience of our business and the strength of our customer relationships and market positions.
"The outlook across AGI is positive as we move through the year with stable backlogs and positive 2 momentum across our business.
"I would also like to stress the outstanding work by our teams globally in dealing with the stress and uncertainty during the current crisis. Our teams have faced the challenges created by COVID with calm determination to continue to support our customers and maintain safety across our facilities.”