February 12, 2010

Ridley Q2 profit increases against lower revenue

North American feed company Ridley Inc. reported a profit of US$5 million in the second quarter, despite an 8% drop in revenue, thanks to improved margins and lower operating costs.

Profit in the year-ago quarter amounted to only US$671,000, therefore the current result signifies a huge improvement.

The company said margins grew with an improved product mix and the stabilisation of raw material prices. Colder weather with good snow cover throughout much of the area it operates was also favourable to beef feed volumes, Ridley said.

Despite the improvement in earnings, Ridley president and chief executive Steve VanRoekel remained cautious in his outlook.

There are indications that producer profitability is improving but animal numbers will remain low in many sectors, VanRoekel said.

"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," said VanRoekel.