Reduced market demand for animal feed due to poor economic conditions caused Ridley Inc’s (TSX:RCL) profits to drop below year-ago levels in the first quarter of its 2010 financial year.
The feed producer, which keeps its books in U.S. dollars, reported net income of $1.1 mil-lion or eight cents per share for the quarter ended Sept. 30. This was down from a year-ago profit of $2.9 million or 21 cents per share.
Revenues for the quarter totalled $135.7 million down from $169.3 million last year.
Ridley said the decline in revenue was due to lower volumes of feed products sold and lower raw material prices.
“While the current downturn has been severe, we recognize that meat, milk and egg pro-duction moves in cycles of profit and loss. We expect that ongoing herd and flock size reduc-tions will eventually restore producer profitability and strengthen demand for animal feed products,” said Steve VanRoekel, Ridley’s president and chief executive officer.
Ridley said its performance continued to be affected by reduced sales tonnage volumes across its operating divisions.
The company said its Feed Operations sector accounted for most of the decline in volume. The company said demand for livestock feed continues to be significantly affected by poor livestock and poultry producer economics, largely as a result of relatively high feed prices and weak demand for meat and milk products.
Ridley’s Nutrition Solutions and Feed Ingredients sectors also recorded lower operating income compared to year-ago levels. This was attributed to the difficult livestock economy and the absence of gains from favourable inventory positions.
The company said however the negative impact of poor market conditions was lessened by overhead cost reductions initiated in the latter half of last year.
Ridley, which has headquarters in Mankato, Minn. and Winnipeg, produces commercial animal nutrition products. It employs more than 900 people in the United States and Canada.
Its shares closed at $7.80 Monday on the Toronto Stock Exchange.