Ag Growth International, a manufacturer of grain handling and storage equipment for farms, reported that overall revenues for the first period of the year fell 1% year-over-year. Most of the falloff was the result of an 18% drop in international sales.

Adjusted EBITDA for the quarter were C$31 million, which, according to David Newman, analyst for Desjardins, includes the impact of AGI’s adoption of IFRS 16that produced an estimated uplift of $0.7 million during the quarter.

Excluding the impact of the new accounting standard, AGI reported adjusted EBITDA of C$30 million. Adjusted EBITDA was largely flat year-over-year despite the inclement weather in the first quarter and a strong comparative last year.

“AGI delivered first quarter 2019 results which met our expectations but fell short of consensus, driven by strong farm segment sales in North America in the face of challenging winter conditions and a positive EBITDA contribution from Brazil, offset by a deferral of commercial business (particularly in international),” said Newman in a note. “We expect growth to pick up in second half of 2019 as weather-related issues dissipate, further supported by robust demand and record backlogs across most geographic segments.”

Regarding AGI’s outlook for the remainder of the year, Newman said, “We believe AGI’s growth will be weighted toward the second half of 2019 due to the hangover from a difficult winter and wet spring weather, coupled with greater conversion of its growing backlog and pipeline of potential work, with a higher backlog in farm year-over-year and very strong backlogs in the commercial business in Canada and international. AGI should be able to maintain its growth trajectory in 2019.”

Ag Growth International — 1Q19 Result
Year Ended Dec. 31
1Q19 1Q18 Change (yoy%)


$77 $73 6%


$95 $87 9%


$44 $54 –18%
Total trade sales $216 $214 1%
FX –1 0 170
Total revenue $215 $214 1%
Margin (%) 14.2% 14.4% –0.9%

Source: Desjardins Capital Markets, Company Reports