Livestock Feeds Plc has said that the 40 per cent hike in the prices of major raw materials – maize and soya bean meal – required in the feed milling industry impacted negatively on its operations in 2015 financial year.
The Chairman of Livestock Feeds Plc, Mr. Larry Ettah, who disclosed this in Lagos at the annual general meeting (AGM), of the company said that the scarcity of the major raw materials led to increased cost in the industry.
Ettah added that acute shortage of foreign exchange and the depreciation of the naira also affected businesses in the sector as importation of certain ingredients became difficult and expensive. “All these increased costs which could not be recovered through price increases, which led to shrunken margins in the industry,” he said.
Consequently, he said as result, the company recorded revenue of N8.9 billion, a growth of 13 per cent over 2014. He however, said that due to the prevailing tough and difficult operating environment, cost of sales increased by about 16 per cent over 2014 leading to a profit before tax of N300 million, a 25 per cent decline on 2014.
In the same vein profit after tax declined by about 26 per cent to N187.9 million, he added.
He, stated that the company is restructuring its operations for an improved performance, adding that the company is in the process of raising additional capital to support its operations.
He pointed out that the company is poised to leverage on improved supply efficiency, develop technical collaborations, enhance operational efficiency, deepen market development to reach the unreached and launch innovative products to enhance its business fortune
Speaking further on the business environment, he said : “Acute shortage and production of poor quality Day Old Chicks (DOC) by hatcheries affected the ability of farmers to restock birds. The breakout of the dreaded avian influenza in the first month of the year which was thought to be an epidemic that would soon fizzle out proved to be a major setback in the industry as it persisted for the better part of the year.
The disease ravaged many farms all over the country leading to culling of millions of birds and further worsening the decreased poultry population as most of the affected farms are yet to restock. In addition, the industry suffered severe egg glut and weak prices of poultry products leading to the inability to recover the increased costs of yields. This led to the shut-down of many poultry farms as the business was considered to be unprofitable”.
