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  • Roger Sugar (RSI) reports Q4 2021 results
  • Sugar volume decreased by 4.7 per cent or 10,643 metric tonnes in the fourth quarter compared to the same quarter last year
  • Sales demand in the industrial and consumer channels were lower than last year’s fourth quarter
  • Adjusted gross margin decreased by $9.5 million in the current quarter compared to the same quarter last year
  • Overall, Rogers believes that its adjusted EBITDA of 2021 was negatively impacted by over $10.0 million in relation with such issues
  • Rogers Sugar Inc.’s (RSI) is up 1.06 per cent, trading at $5.71 at 2:39 pm EST

Roger Sugar (RSI) reported fiscal 2021 results with consolidated adjusted EBITDA of $24.8 million and $91.0 million for the current quarter and the year, respectively.

“We are pleased with the results achieved in the fourth quarter in both of our business segments, as we met our volume targets with improved overall sales margins, said Mike Walton, President and Chief Executive Officer of Rogers and Lantic Inc.”

“Over the next year, we anticipate improved financial performance for both of our business segments, supported by normal operating conditions in Alberta and a return to a more traditional and profitable sales mix. This will allow us to continue to create value for our shareholders,” added Walton.

In the fourth quarter, revenue increased by 1.5 per cent compared to the same period last year driven by increased pricing, despite having one less week of operation.

Sugar volume decreased by 4.7 per cent or 10,643 metric tonnes in the fourth quarter compared to the same quarter last year mainly due to one less week of operation in the current quarter; the extra week represents approximately 15,000 metric tonnes.

Sales demand in the industrial and consumer channels were lower than last year’s fourth quarter, which was partly offset by an increase in the liquid and export volumes during the same period.

The reduction in industrial volume is mainly due to last year’s additional week of operation as it continues to see firm industrial demand.

The decrease in consumer volume is also attributable in part to the additional week of operation in fiscal 2020 and timing variances of purchases from retailers who had a higher inventory of packed sugar in 2021. These reductions in volumes were partly offset by an increase in liquid volume.

Adjusted gross margin decreased by $9.5 million in the current quarter compared to the same quarter last year.

The unfavourable variance was mainly due to a $3.1 million, one-time gain recorded in the fourth quarter of 2020 related to the prior period settlement of carbon credit claims, a $2.9 million non-recurring expenditure associated with future pension liabilities included in the Montreal recently negotiated collective agreement.

On a per-unit basis, the adjusted gross margin for the fourth quarter was $121.16 per metric tonne, lower than the same quarter last year by $36.35 per metric tonne.

The decrease was due mainly to non-recurring items explained above. Excluding the impact of such items, the variance in adjusted gross margin on a per unit basis would have been unfavourable by $9.10 per metric tonne mainly due to lower sugar sales margin and higher production costs.

Adjusted EBITDA for the fourth quarter decreased by $7.3 million compared to the same period last year, largely as a result of lower adjusted gross margin, offset by lower administration and selling expenses as well as lower distribution costs.

During the quarter, administration and selling expenses were lower by $1.2 million compared to the same quarter last year due mainly to a decrease in COVID-19 related health and safety costs and lower compensation cost and related employee benefits. 

The adjusted gross margin for the current quarter was $0.4 million higher than the comparable period last year, driven by a combination of higher sales margin from increased pricing and lower costs from improved operational efficiency.

Improved profitability was also reflected in our adjusted gross margin percentage, increasing by 180 basis points to 9.7 per cent in the current quarter, up from 7.9 per cent in the same quarter last year. Revenues for the current quarter were $5.8 million lower than the prior comparable period due to a reduction in sales volume.

Overall, Rogers believes that its adjusted EBITDA of 2021 was negatively impacted by over $10.0 million in relation to such issues. This includes weather-related unfavourable impacts with our sugar beets in Alberta, the costs associated with the recognition of prior period past service charges related to the new Montreal refinery collective bargaining agreement, and the lingering effects of COVID-19 related expenditures for preventive measures and logistics.

The company also expects the sugar segment to perform well in fiscal 2022. The underlying demand remains strong across all our customer segments in its domestic market while it is anticipating a reduction in the export market. 

We expect sales volume for 2022 to reach approximately 770,000 metric tonnes, representing a reduction of 9,500 metric tonnes compared to 2021. While we anticipate the domestic volume to grow steadily at 2 per cent, exports opportunities will not be as high as in 2021, resulting in a reduction in volume. Overall, we see the following volumes variances for our customer segments.

For fiscal 2022, we expect the Maple business segment to outperform the 2021 results. Our outlook is mainly based on an expected improvement to sales margins, a trend established in 2021 and driven by successful contract negotiations with new and existing customers.

Rogers Sugar Inc.’s (RSI) is up 1.06 per cent, trading at $5.71 at 2:39 pm EST.

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