Feed maker Ridley Inc. reports a higher profit in the last three months of 2009, even as its feed sales drop due to cutbacks in Canada’s livestock herds.
The company, headquartered both in Winnipeg and at Mankato, Minn., on Tuesday reported net earnings of $5 million on gross revenue of $150 million for its second quarter ending Dec. 31, down from $700,000 on $163.6 million in the year-earlier period.
Lower revenue in Ridley’s Q2 was due to lower volumes and raw material prices, the company said. Total sales volumes in tonnes were down 4.8 per cent from the year-earlier period.
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The lower volume was seen in Ridley’s feed operations segment, “particularly in Canadian feed operations where poor producer profitability has led to reduced animal numbers,” the company said.
Boosting net income, however, were Ridley’s improved unit margins due to an “improved product mix” and the stabilization of raw material prices, the company said. “Efficiency initiatives” last year also helped improve its operating cost structure, Ridley added.
Colder weather with good snow cover throughout much of Ridley’s trade area was “favourable to beef feed volumes,” the company said.
Given the “difficult economic environment” for livestock and poultry producers, Ridley is “satisfied” with its results but remains “cautious in our outlook for the remainder of the year,” CEO Steve VanRoekel said Tuesday.
“There are indications that producer profitability is improving but animal numbers will remain low in many sectors. While that happens, a strong balance sheet puts us on a solid footing to move forward with new business development initiatives that will position Ridley for future growth.”
