Rogers Sugar reported fourth quarter and year-to-date fiscal 2020 results on Nov. 25 looked relatively sweet.
The Company recorded adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $31.2 million and $92.3 million for fourth quarter and fiscal 2020, respectively, versus $22.2 million and $87.8 million for the comparable periods last year.
"Our strong fiscal 2020 performance is a direct result of the efforts of our agile committed team and our long-term strategic vision to continue to build a resilient, successful company,” said John Holliday, President and Chief Executive Officer of Rogers and Lantic Inc. "During the year, we generated higher revenue, improved margins, and increased free cash flow, all while dealing with the impacts of a global pandemic, a severely curtailed beet harvest and rail blockades. During this time, the safety of our people has remained our top priority and by implementing thorough safety practices and protocols, our operations have continued to perform at full capacity. In addition, we successfully restructured our supply chain to ensure our customers’ needs were met while also completing our capital improvement projects that will drive long-term efficiency and cost improvements. Looking forward to fiscal 2021, we expect that our strong performance will continue due to the continued firm demand from our customers and to a reduction in operational and distribution costs mostly related to the return of a normal harvest and beet sugar production in Taber."
Update on COVID-19
In December 2019, a novel strain of coronavirus, known as COVID-19 was identified. As of March 20, 2020, COVID-19 had spread to over 100 countries and been declared a pandemic by the World Health Organization. COVID-19 has negatively impacted the global economy, disrupted financial markets and supply chain, significantly restricted business travel and interrupted business activity.
Their business is considered essential services by the government and as such, the Company’s plants have continued to operate at usual capacity. The Company has established extensive protection measures and protocols to ensure the health and safety of its employees. COVID-19 could have a material effect on our business as it relates to customer demand, supply and delivery chain, operations, financial market volatility, pension and benefits liabilities and other economic fundamentals.
The effect of COVID-19 on our business may continue for an extended period and the ultimate impact on the Company will depend on future developments that are uncertain and cannot be predicted, including and without limitations, the duration and severity of the pandemic, the duration of the government support measures, the effectiveness of the actions taken to contain and treat the disease, and the length of time it takes for normal economic and operating conditions to resume.
In fiscal 2021, the Company expects Adjusted EBITDA to benefit from the return to normal operating conditions in its Taber beet sugar facility. In the fall of 2019, the beet harvest was suspended early due to the impact of severe adverse weather in Alberta. As a result, the crop derived a much inferior quantity of refined sugar resulting in a shortfall of approximately 62,000 metric tonnes. For the 2020 crop, the Company contracted 30,000 acres for planting in Taber, an increase of 2,000 acres from last year.
In addition, Taber started harvesting and slicing earlier than previous years and, under normal growing conditions, the new crop is expected to yield approximately 132,000 metric tonnes of beet sugar.
Maintenance programs for the three operating facilities are expected to follow the trend of previous years. Spending on capital projects is also expected to be similar to recent periods. For fiscal 2021, the Company anticipates spending between $25.0 million and $30.0 million on various capital projects, with approximately a quarter allocated to return on investment projects.