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Source: Ridley Inc. news release

To view entire report report, click here.

Ridley Inc. (TSX: RCL) today reported its financial results for the first quarter of fiscal 2013, the three months ended September 30, 2012. All currency amounts are stated in U.S. dollars unless otherwise noted.

For the first three months of fiscal 2013, Ridley's earnings before interest, taxes, depreciation and amortization (EBITDA (i)) were $10.2 million compared to $3.8 million last year. Net profit after income taxes (NPAT) was $5.3 million ($0.41 per share) compared to $0.7 million ($0.06 cents per share) last year.

"Our earnings results for this quarter are clearly satisfying, but we note that these were the result of exceptional circumstances impacting commodity prices and forage availability largely brought about by the severe drought in the United States. We remain concerned for our customers, livestock and poultry producers, whose operations are being stressed by high commodity prices and increased costs from replacing normal forage sources with commercial feed supplements," said Steve VanRoekel, President and CEO of Ridley Inc.

"While Ridley is well positioned to respond to market dynamics, we are also cognizant that these are unusual conditions. Eventually the effects of the drought, and its positive stimulus to feed demand, will diminish and more normal conditions should return," added VanRoekel.

Ridley's tonnage volumes were 3.9% higher in the first quarter of fiscal 2013 while gross profits increased by 32.5% to $22.5 million from $17.0 million last year. Sales revenues of $174.3 million were 11.4% higher than last year but the major part of this increase was the effect of higher raw material costs on selling prices.

The increase in Ridley's gross profits this quarter reflects volume growth, partly the effect of the drought on demand for feed and forage supplementation, and inventory gains realized from sharply higher prices in the last several months for commodities and other feed ingredients.

Net operating expenses decreased by $1.2 million on more efficient administrative activities and a reduction in bad debts provisions. Operating expenses last year included a loss on the sale of facilities and overheads related to two facilities that were closed later in the year.

U.S. Feed Operations (USFO) and Ridley Block Operations (RBO) produced strong results in the first quarter of fiscal 2013 on increased volumes of feed supplements and feed blocks in the beef cattle sector and improved unit margins. Prices for most feed commodities were sharply higher in the first quarter of fiscal 2013 as a result of drought conditions throughout much of the United States.

Inventory gains from rising feed ingredient prices were favourable to unit margins. Poor pasture and forage conditions contributed to increased demand for supplements. Ridley Feed Ingredients (RFI) reported results in the first quarter that were largely unchanged from last year. Canadian Feed Operations (CFO) reported lower volumes in the first quarter as a result of the temporary closure of a facility in Brandon, Manitoba during a major capital project.

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