Weak commodity prices and political unease in Eastern Europe have led to a year-end loss for Canadian farm equipment and Versatile tractor maker Buhler Industries.
Winnipeg-based Buhler on Tuesday reported a net loss of $5.3 million on revenues of $245.7 million for its year ending Sept. 30, down from a $12.5 million profit on $325.5 million in revenue in the previous fiscal year.
Sales in Canada were flat compared to 2014 levels, while its sales into the U.S. and Eastern Europe have “declined significantly,” the company said.
Buhler, majority-owned by Russian farm equipment maker Rostselmash, partly offset its sales decline with gains on lower amortization from its previous cuts in capital spending, plus lower interest expenses from paying down long-term debt.
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Looking ahead, the company said, demand for farm equipment is expected to continue weaker in 2016 due to lower commodity prices. “General economic uncertainty” due to the “unstable political environment” in Buhler’s markets in Eastern Europe has also impacted export sales, the company said.
Buhler’s inventory levels have dropped and are expected to drop again in 2016, the company said, while increased competition for equipment sales will lead to lower margins.
That said, Buhler expected the increased strength of the U.S. dollar in 2016 will provide “some relief” for declining margins. — AGCanada.com Network
