Viterra Inc (VT.TO: Quote) said on Wednesday its quarterly profit nearly doubled, driven by record grain shipments through ports in Australia, higher grain prices, and strong demand for fertilizers in North America.
Viterra, the biggest grain handler in Canada and South Australia, said strong shipment volumes are expected to lift its grain-handling and marketing operations going into its fiscal 2012, beginning in November.
The Calgary, Alberta-based company stands to benefit from bigger grain and canola harvests this autumn in Western Canada, although spring flooding left millions of unplanted acres for a second straight year.
Across the Canadian Prairies, the harvest is well underway and higher than average yields are expected from this year's crop due to favorable weather for much of the growing season, the company said.
The quality of the crop in Western Canada looks promising. However, it is dependent on favorable harvest weather for the next couple of months, the company said in a statement.
Shares of the company were up 43 Canadian cents at C$10.73 in midday trading on the Toronto Stock Exchange on Wednesday.
Earnings rose to C$123.25 million ($124.7 million), or 33 Canadian cents a share, in the company's third quarter, ended July 31, compared with C$63.54 million, or 17 Canadian cents, a year earlier.
Analysts had expected earnings of 30 Canadian cents a share, according to Thomson Reuters I/B/E/S.
In a note to clients, UBS analyst Tasneem Azim said the company's agri-products business drove much of the earnings increase, while results from its food processing business were in-line with her expectations.
Azim, who has a buy rating on the stock, also noted that results from the grain-handling and marketing arm were slightly below her expectations.
Quarterly revenue rose to C$3.55 billion from C$2.49 billion.
South Australia ports shipped a record high 6.8 million tonnes of grain from last October through July. Viterra owns 95 percent of South Australia's storage and handling network.