By Tim Kalinowski on August 5, 2021.
Rogers Sugar Inc. announced it will be paying a quarterly dividend of $0.09 per share, or about $9.3 million, after stronger than expected sugar sales in 2021.
“Our full year fiscal 2021 sales volume guidance remains unchanged at approximately 776,000 metric tonnes, an increase of 15,000 metric tonnes over fiscal 2020, despite an extra week of operations in 2020. The volume for domestic sales is expected to remain consistent with prior year,” confirms Rogers Sugar, which owns Lantic in Taber, in its third quarter report released on Wednesday.
Rogers goes on to also confirm it expects a complete rebound in industrial and consumer demand to pre-COVID levels after the third quarter.
Factors driving a relatively strong sugar market recovery are higher export volumes driven by new export quotas, including the CUSMA special quotas that took effect on July 1, 2020, and “other opportunistic export sales to the United States and Mexico.”
Alberta sugar beets were given a special quota status under the new free trade deal negotiated between the United States, Canada and Mexico because they are Canada’s only domestically produced and manufactured sugar source.
Rogers confirms this special status has been a significant linchpin in allowing an extra 20,000 metric tonnes of sales of Canadian sugar this year.
While the sales picture is looking pretty bright, Rogers Sugar confirms it’s not all sunshine and roses for the Canadian homegrown sugar beet industry in southern Alberta with a relatively poor harvest last year.
“Our 2020 beet harvest campaign was completed, despite weather-related sugar beets deterioration, with an estimated production of 119,000 metric tonnes of beet sugar, 48,000 metric tonnes higher than last year but approximately 9,000 metric tonnes lower than expected as sugar beets had to be discarded at the end of the slicing campaign due to their severe deterioration,” the company confirms. “As a result, higher processing costs were incurred at the Taber facility due to the poor quality of the sugar beets at the end of the slicing campaign.”
Rogers goes on to state, despite the challenges, the issues with last year’s harvest were not as significant as those experienced in 2019.
“For the remainder of 2021,” the company states, “we expect distribution costs to be lower than last year as the impact of the current year crop shortfall in Taber was not as severe as last year’s crop issue, requiring less backfill of customer orders from our Vancouver facility.”
With things looking generally up in the Canadian sugar market, Rogers Sugar confirms it will be investing an additional $20-$25 million in capital spending this year, with a quarter of these funds “allocated to return-on-investment projects.”
Rogers Sugar does not elaborate on how and where these additional capital funds will be spent in its press release.
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