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Thriving Viterra sets sights on acquisitions

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Viterra said it was in the market for acquisitions, and set its sights on global expansion, as the Canadian feed-to-fertilizer giant announced record annual results.

Chief executive Mayo Schmidt said the group, which also has operations in the US, Japan and Singapore, was intent on increasing its global footprint.

"Our goal is to become a global agri-business leader and a key supplier of ingredients to the world," Mr Schmidt said.

Viterra was seeking deals "at the right price", having already walked away from a number of potential targets.

"We are identifying businesses with quality assets, strong management teams and complementary market positions," he said.

The group's last big acquisition, of rival grain-handler Agricore United in 2007, was bedding in well, with nearly all the $116m Viterra was seeking in cost savings and other deal benefits achieved by October 31, the end of the group's financial year.

Weak outlook for grain shipments

Mr Schmidt credited productivity gains achieved from the deal for a large part of the group's 150% rise to Can$288.3m (US$236.0m) in earnings for the year on revenues up 90% at Can$6.78bn.

In the fourth quarter, revenues grew 34% to Can$1.72bn, helped by the soaring prices of fertilizers sold by Viterra's Agri-products division.

The main grain handling division raised taking despite a 24% fall to 3.5m tonnes in shipments.

Viterra forecast that, with commodity prices well below their peak, grain shipments would remain depressed despite bumper crops last year as farmers stockpiled crops in expectation of higher prices.

Shares soar

The group also braced investors for a $30m-40m writedown in the carrying value of its fertilizer stocks, thanks to market falls, particularly in phosphate values.

However, demand for fertilizer was set to rebound as farmers, who enjoyed record harvests in many crops last year, sought to revive soil nutrient levels.

Viterra shares surged 13.9% to Can$9.34 on the Toronto stock exchange.

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