In the first half of 2008, Kiotech International's sales reached GBP 2.7 million (US$4.7 million), down from GBP 2.8 million (US$4.9 million) from the same period in 2007.
Pre-tax profit before share-based payments was at GBP 227,301 (US$397,198), down from last year's GBP 266,057 (US$465,179). As of June 30, 2008, cash balance was at GBP 1.4 million (US$2.4 million).
The performance reflects the significantly tougher market conditions, rising raw material prices and the impact of the weak dollar in the first half of the year.
Kiotech management acted to control costs and pricing to counter price increases in raw materials and energy, but this led to short-term effect on sales as meat producers remove feed additives to offset rising input costs.
Sales in 24 countries increased compared with the same period last year, and 19 countries saw double-digit percentage increases. The largest growths were achieved in Australia, Chile, South Korea, Spain and the United Arab Emirates (UAE).
Kiotech's acid product range was affected significantly as suppliers were impacted by high oil and energy prices and a major European producer taking its plant offline at a time of peak demand. However, the rate of price rise seems to have slowed in recent weeks and the company expects the second half to be more settled.
Kiotech, in the meantime, has appointed new distributors in Belarus, Brazil, Egypt, Indonesia and Vietnam to drive sales growth in the future.
In the outlook for the second half of 2008, chairman Richard Rose said there are signs that the upward pressure on input costs may be abating but the company will remain cautious. New product development and a further expansion of their overseas sales base will be the growth drivers in the agriculture and aquaculture divisions, Rose said.