Ridley Inc.: strong growth in 3rd quarter
Canadian feed maker Ridley Inc. reported its financial
results for its fiscal 2008 third quarter ended March 31, 2008. Earnings
rose to $11.0 million compared to $6.8 million in the same period last year.
At the same time, the company is selling its North American assets.
Earnings are before interest, taxes, amortization and asset impairment loss
(EBITA). Ridley reported net earnings of $5.0 million after income taxes in the
third quarter of fiscal 2008 compared to net earnings of $3.1 million for the
same period last year.
"Ridley's net earnings growth of 65% in the third
quarter of fiscal 2008 was an encouraging result because it was a product of
generally strong earnings across all of our divisions under increasingly
challenging market conditions", reported Steve VanRoekel, President and CEO of
"Gross profits improved by 25% over the same period last
year, largely as a result of strong volumes in our US businesses, which
benefited from an exceptionally cold winter season in contrast to last year,
good margins and well managed operating costs. This led to an increase in third
quarter EBITA over last year of 62% for Ridley as a whole", added
Pig sector under pressure
While North American grain
producers are enjoying record prices, these same conditions are pressuring all
livestock and poultry producers, especially the pig sector, which has
experienced recent record or near-record losses.
In particular, the
Canadian swine industry is already well into a significant herd reduction, the
first period of negative growth in more than a decade. As a result, in the first
and second quarters of fiscal 2008 Ridley initiated a restructuring in its
Canadian operations to reduce operating costs.
Ridley earlier reported
the rationalization of manufacturing facilities in Lethbridge, Alberta and
Winnipeg, Manitoba as a part of that plan. The restructuring plan was
successfully completed by the end of December and led to a significant
improvement in Canadian earnings in the third quarter.
In March of this year
Ridley acquired the feed supplement block manufacturing business of Ultralyx and
4 Seasons Marketing, LLC located in Flemingsburg, Kentucky.
The acquisition expanded RNS's block product lines into a
new category featuring the use of ethanol co-products, and enabled the company
to consolidate production from their Syracuse, Indiana plant to generate cost
synergies. The Syracuse facility was subsequently closed in early
Sell off North American feed mills
Headquartered in Mankato, Minnesota
and Winnipeg, Manitoba Ridley Inc. is a publicly traded company on the Toronto
Stock Exchange. But Ridley Corporation Limited of Australia owns the majority of
the shares in Ridley Inc., with the remaining held by a variety of institutions
and individuals. Ridley Corp. itself operates feed and salt businesses in
Australia, with headquarters in Sydney, New South Wales. Now the Canadian branch
is looking for a buyer, its chairman said on Wednesday, after its Australian
parent Ridley Corp said it wants to sell its stake. "We've contacted people who
we think might be interested, but this is a public company, so there's any
number of things that could happen," Brian Hayward said in an
Australian feed maker Ridley Corp, which built its North
American business through a series of acquisitions during the past 15 years,
said that, for the right price, it would bow out of the race to consolidate the
feed industry. "It is difficult for Ridley Corp to support and facilitate the
pursuit of these opportunities in a funding and strategic sense," the company
said in a release. The Australian feed maker owns 69% of the North American
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