Despite downturn, Buhler Inc. optimistic
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Hey there, time traveller!
This article was published 16/05/2009 (6020 days ago), so information in it may no longer be current.
Agricultural equipment-maker Buhler Industries Inc. (TSX:BUI) says a recent drop in demand for tractors has resulted in a bigger inventory buildup than anticipated.
As a result, the Winnipeg company expects the second half of its 2009 financial year will be softer than the first six months — although overall sales growth its expected to continue, Buhler said Friday.
Buhler said revenues increased to $93.35 million in the three months ended March 31, the second quarter of fiscal 2009, up 86 per cent from $50.5 million a year earlier.
For the first six months, sales ended March 31, sales were $150.4 million, up 123 per cent from $67.4 million from the prior year.
Overseas sales to Combine Factory Rostselmash Ltd., the Russian combine manufacturer that is majority owner of Buhler, were up $40.7 million in the six-month period over the prior year and accounted for half the year-to-year increase.
Net income for the company’s fiscal second quarter was $4.6 million, or 18 cents per share, up from $3.2 million or 13 cents per share.
However, gross profit decreased to 15.2 per cent of revenue from 19 per cent in the prior year due to higher material costs and stronger sales in the tractor division which traditionally carries lower margins, Buhler said.
Second-quarter selling and administrative expenses increased to $4.9 million, up from $3.9 million the year before, as the company increased its employee count and spent more on advertising and travel.
Research and development spending increased to $2 million, up from $600,000 a year earlier.
“The market for agricultural equipment in North America is projected to see a small decline from the prior year. Eastern Europe and Russia are experiencing significant credit issues and as a result, overseas sales for the remainder of 2009 will decline.”
The company said it is reducing its production schedule to reflect the lower demand for tractors but despite that “we anticipate sales for the next six months to be only slightly below the first six months of the year.”
In contrast to tractors, demand for Buhler’s short-line products — such as grain augers and front-end loaders — remains strong.
— The Canadian Press