August 29, 2008 


Lower cattle feed volumes halves Ridley's profit in Australia


Lower cattle feed volumes and losses in its supplements business caused profits of Ridley Corporation Limited in Australia for the year ended 30 June 2008 to halve to AUS$10.5 million, compared to AUS$22.7 million last year.


Ridley AgriProducts earnings declined by 18 percent due to losses incurred in its supplements business unit and reduced demand primarily in the beef sector. Seasonal conditions and a poor business at a new supplements facility also affected the bottomline.


Feed volumes were down 12 percent, particularly in the dairy, beef and sheep sectors. Poultry and pig feed volume levels remained largely unchanged despite the pig sector coming under significant pressure.


The division's northern region mills in Queensland performed poorly in response to the reduced beef volumes.


One bright spot is the aquafeed business, which continued to perform well and was well above last year.


North American operations performed better due to improved margins resulting from rising ingredient demand, mainly vitamins and trace minerals.


The unit's strategy of changing product mix from high volume, low margin complete feeds towards higher margin products like supplements and premixes is also paying off.


This, together with strict cost controls, helped make up for a small decline in volumes overall.


The company's Canadian operations are also looking up thanks to a restructuring programme which returned the business to profitability even though volumes were 5 percent lower than last year.

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