May 26, 2009
Land O'Lakes reports 35-percent increase in Q1 net earnings
US agricultural cooperative, Land O'Lakes Inc, announced its first quarter net earnings increased 35 percent on-year to US$82.7 million.
Net sales for the quarter were US$2.9 billion, down from US$3.3 billion for the same quarter one year ago.
Total EBITDA reached US$112.8 million, down from US$109.3 million a year ago.
Land O'Lakes' pretax earnings in Feed totalled US$5.3 million, down from US$9.4 million for the first quarter of 2008. Feed sales totalled US$894 million, down from US$942 million a year ago.
Company officials cited market conditions and economic stress, particularly in the livestock and dairy markets, among the factors affecting performance as producers lowered volumes and shifted from fully formulated branded feeds to lower value feeds.
In terms of volume, Livestock feed was down 14 percent on-year, Lifestyle feed up two percent, Milk Replacers up five percent, and Feed Ingredients were flat against a year ago.
Despite the results, Land O'Lakes President and Chief Executive Officer Chris Policinski said soft commodity markets and impacts of economic uncertainty on consumer and producer purchasing decisions continue to present challenges to the company.
But in response, the company has intensified its focus on cost control, risk management and product mix adjustment, Policinski said.
