November 4, 2009
Ridley Q1 income down 62 percent on-year
North American feed company Ridley Inc. earned US$1.1 million after income taxes in the first quarter of fiscal 2010, down 62 percent from US$2.9 million in the same period last year.
Earnings before interest, taxes and amortisation (EBITA) for the first quarter were US$4.4 million compared to US$7 million last year.
The results reflect, for the third consecutive quarter, reduced market demand for animal feed products caused by poor economic conditions for many livestock and poultry segments across Canada and the US, said Steve VanRoekel, president and CEO of Ridley Inc.
However, Ridley expects ongoing herd and flock size reductions will eventually restore producer profitability and strengthen demand for animal feed products, he said.
The external drivers of Ridley''s commercial feed business are strongly influenced by the economic dynamics of the North American livestock and poultry production industry.
This year, raw material costs have eased, leading to a drop in feed prices and profits for ingredients have decreased.
Lower gross profits this year were partly mitigated by significant overhead cost reductions that were initiated in the last half of the prior year, which contributed to operating expenses that were lower this year by US$2.8 million compared to last year.
Volumes were lower in each of Ridley''s divisions with the most significant effect concentrated in the traditional feed businesses of Ridley Feed Operations in Canada and the US. Earnings in the more specialised divisions of Ridley Nutrition Solutions and Ridley Feed Ingredients were down due to lower volumes and less favourable ingredient positions.