Ridley Corporation feed sales hit by Covid-19 pandemic
The feed producer cited factors such as the expiry in October 2018 of a large supply agreement with poultry integrator, Inghams Enterprises - year on year 65,000 tons reduction - the pass through of raw material price movements and reduced sales as a result of the Covid-19 pandemic.
Revenue from continuing operations after tax saw a loss of AUS$8.64m.
Significant items that impacted the financial results included the closure and replacement of three feed mills, together with restructuring costs, asset impairments and the settlement of a legal claim in February this year with leading Australian poultry producer, Baiada in respect of feed manufactured for Baiada at Ridley’s Wasleys feed mill in South Australia.
The company’s earnings before interest, tax, depreciation and amortization (EBITDA) from ongoing operations were AUS$64.3m in FY20, an increase of 8.2% compared to FY19.
Ridley reported a 13% improvement in financial performance from ongoing operations in FY20. It invested AUS$42.9m in capital expenditure including an investment as regards the production of its Novacq feed additive in Thailand.
However, the company said its growth strategy was expected to deliver improved earnings in the 2021 financial year.
Managing director, Quinton Hildebrand, recently announced that Ridley is now focusing on certain optimization initiatives aimed at simplifying the business, installing automation, leveraging its raw material and consumable procurement and rationalizing the supply chain.
New monogastric feed mill in Victoria
Earlier this month, Ridley officially open a new feed mill in Victoria. The AUS $47m plant will supply 350,000 tons of poultry and pig feed to local farmers.
Construction of the mill, located at Wellsford near Bendigo in Victoria, started in April 2019, after Ridley identified that an existing facility in Bendigo had reached capacity, and was unable to support future growth of the region’s animal protein industry.
Employees and production have been transitioned to Wellsford from that older mill in Bendigo, which has now been closed and is being prepared for divestment.
