Viterra Inc : Viterra's Volumes and Earnings to Increase from Grain Marketing Freedom in Canada

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2012) - Viterra Inc. (TSX:VT) (ASX:VTA) ("Viterra") today provided guidance on the projected financial benefits to the Company as a result of the new regulatory environment for the marketing of grain in Canada. With the ability to purchase all grades of wheat, barley and durum directly from growers, the Company expects to increase its earnings by attracting additional volumes and optimizing its operational efficiencies. Viterra anticipates the additional volumes at primary grain elevators and port terminals will generate higher revenue from the fixed cost facilities and earn additional merchandising margins. Viterra expects to capture supply chain efficiencies as it executes with a higher degree of precision given direct relationships with the railroads and an unmatched asset network.

Viterra expects to begin realizing modest benefits in the fourth quarter of 2012, with more significant impacts in 2013. In fiscal 2014 and beyond, the Company anticipates its annual earnings before interest, taxes, depreciation and amortization (1) ("EBITDA") to increase by $40 million to $50 million per annum. This guidance is based on the assumption of an increase in consolidated global pipeline margin of $2.00 to $2.50, which includes a 1.0% to 2.5% market share increase.

Viterra is a market leader in Canada with assets, people and a global marketing network in place to efficiently source and market grains and oilseeds around the globe. As a result, the Company does not expect to incur any additional growth capital expenditures to achieve this earnings benefit. Additional grain purchases will require $150 million to $200 million of incremental working capital, which will be provided by operating cash flows and existing credit facilities.

To date, Viterra has been limited to marketing oilseeds, pulses, oats and other grains, while the Canadian Wheat Board held a legislated monopoly in Western Canada over the purchase and marketing of wheat, barley and durum for export and human consumption. Following the passage of the Marketing Freedom for Grain Farmers Act ("the Act"), growers now have the freedom to sell their wheat, durum and barley to buyers of their choice for delivery on or after August 1, 2012. Despite a legal challenge from opponents of the legislation, Viterra remains confident that there will not be any delays to the implementation of the Act. Leveraging its market expertise and relationships with growers, Viterra was the first company to offer bids to buy these grains directly from growers.

"This is an exciting era for both Canadian grain producers and for Viterra," said Mayo Schmidt, President and CEO of Viterra. "Viterra has built an impressive global footprint with irreplaceable assets in Canada and South Australia, two of the world's most important export markets, and an international marketing network spanning the globe. This allows Viterra to be a leading exporter of key ingredients and highly competitive on a global basis. With the new marketing freedom in Canada, Viterra's international network will benefit growers as it provides them access to additional global markets."

(1) Adjusted EBITDA ("EBITDA") - Earnings before financing expenses, taxes, goodwill impairment, amortization, (gain) loss on disposal of assets, integration expenses, and net foreign exchange gain (loss) on acquisition. Those items excluded in the determination of EBITDA represent items that are non-cash in nature, income taxes, financing expenses or are otherwise not considered to be in the ordinary course of business. These measures are intended to provide further insight with respect to Viterra's financial results and to supplement its information on earnings (losses) as determined in accordance with GAAP.

Forward-looking statements

This news release contains certain information that is "forward-looking information", "forward-looking statements" and "future-oriented financial information" (collectively herein referred to as "forward-looking statements") within the meaning of applicable securities laws. Forward-looking statements in this press release are intended to provide Viterra security holders and potential investors with information regarding Viterra and its subsidiaries, including management's assessment of Viterra's and its subsidiaries' future financial and operational plans and outlook. All statements in this press release, other than those relating to historical information or current conditions, are forward-looking statements. All forward-looking statements reflect Viterra's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Such forward-looking statements involve known and unknown risks and uncertainties as well as various assumptions and business sensitivities, including those risks referred to in the Company's most recent Management's Discussion and Analysis and the Company's most recent Annual Information Form, which may cause the actual risks, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. All of the Company's forward-looking statements in this press release are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions that commodity prices remain similar to their current levels, that the recent court challenges or any other court challenges respecting the validity, enforceability or implementation of the Canadian Marketing Freedom for Grain Farmers Act are ultimately unsuccessful, and that no delays are encountered in the implementation of this legislation.

Although Viterra believes that these assumptions are reasonable, they are not exhaustive of factors that may affect any of the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among others, risks related to weather, politics and governments, changes in environmental and other laws and regulations, competitive factors in agricultural, food processing and feed sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments, global and local economic conditions, the ability of Viterra to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company's assets, the availability and price of commodities and the regulatory environment, processes and decisions. Additional information on these and other factors is available in the reports filed by Viterra with Canadian and Australian securities regulators. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this press release or otherwise, and not to use future-oriented information or financial outlooks for anything other than their intended purpose. Viterra undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

About Viterra

Viterra provides premium quality ingredients to leading global food manufacturers. Headquartered in Canada, the global agri-business has extensive operations across Canada, the United States, Australia and New Zealand, as well as a growing international presence that extends to offices in Japan, Singapore, China, Vietnam, Switzerland, Italy, Ukraine, Germany, Spain and India. Driven by an entrepreneurial spirit, Viterra operates three distinct business segments: Grain Handling and Marketing, Agri-products and Processing. Viterra's expertise, close relationships with producers and superior logistical assets allow the company to consistently meet the needs of the most discerning end-use customers, helping to fulfill the nutritional needs around the world.