Vitarich Corp. a listed producer and wholesaler of poultry and animal products in the Philippines, ended last year with a loss again. It did not succeed to gain from the reduction of its debts due to the approval of its rehabilitation plan in 2007.
Vitarich, whose shares have been suspended from trading since the company filed for rehabilitation in 2006, posted P264.18 million (€4.19m) in losses last year from a profit of P769.72 million (€12.20m) in 2007, documents from securities regulators showed.
The firm’s margins were boosted then by the recognition of P859.67 million (€13.34m) in income from the court’s approval of the company’s rehabilitation proposal. Its losses reached P210.85 million (€3.34m) in 2006.
Vitarich and its subsidiaries ended 2008 with sales up by 12.45% to P2.76 billion (€ 43.7m) from P2.45 billion (€38.8m).
Too high cost increases
"Gross profit margins declined to 36% from 2007 level, also on the account of higher raw materials cost that affected the company’s performance in 2008.
“The effort to improve margins was made by increasing prices, but these increases were not sufficient to cover the rise in material cost," the firm said.
It added that administrative and selling expenses also increased by almost 13% to P364.96 million (€5.78m), despite cost-cutting measures.
Vitarich said since it remains under rehabilitation, it plans to continue focusing on core businesses and improving efficiency of its manufacturing facilities.
The company also plans to intensify its marketing efforts this year to expand its customer base and boost revenues.
Asian crisis and bird flu
In 2006, Vitarich filed a petition for 15-year debt relief after having difficulty paying off loans and liabilities amounting to P3.23 billion (€51.2m).
The company blamed its financial woes to the slowdown in its chicken and poultry feed business due to the Asian financial crisis of 1998 and the avian flu outbreak in 2003.
is engaged in animal feed and livestock operations in plants located throughout the Philippines.
The company produces pig, poultry, aqua, and other specialty feed requirements for its livestock operations.
Feeds are formulated, produced, stored, and marketed in mash, pellet, crumble, and extruded forms.
The product line consists of broiler, layer, pig, aqua, and other specialty feeds.
The feeds are sold to distributors, dealers, and end users. Vitarich’s livestock operations involve everything from breeding and growing to marketing of animals.