The past year was another disappointing one for Buhler Industries, with declining sales and a slumping stock price.
The Winnipeg-based agricultural equipment manufacturer has limped through two consecutive years of weak North American sales, which it attributes to poor harvests, slumping commodity prices and trade uncertainties. Over the course of the last two years, annual sales have fallen by nearly 27 per cent, from $312 million in 2017 to $229.1 million for its year ending Sept. 30.
While market conditions have proven to be a challenge for Buhler — makers of the Versatile tractor as well as a number of other farm implements — the company has been successful at increasing productivity. A 3.3 per cent increase in gross margins was one of the only positive signs for 2019.
The company believes conditions will not likely change enough in 2020 to cause much improvement. It believes trade uncertainties and even lower commodity prices will continue to be a factor in the marketplace.
The company recorded a net loss of $22.9 million for the 2019 fiscal year, $20 million less than the previous year.
In 2019, the company did grow its North American dealership base, with 14 new dealers added in Quebec, New Mexico and Utah — all new markets for the company. The company’s Versatile tractors are also sold in 200 dealerships in Russia, Ukraine and Kazakhstan. They are facilitated by Buhler Industries’ majority owner, Combine Factory Rostselmash Ltd., a large combine manufacturer based in Rostov-on-Don, Russia, which acquired 80 per cent of the shares Buhler Industries in 2007.
The company expects an increase in sales in 2020 because of the introduction in early spring of a new mid-range, front-wheel assist tractor called Versatile Nemesis Series, with horsepower ranging from 175 to 250. The company also signed a long-term manufacturing agreement with Japanese equipment maker, Kubota, to build a new mid-range tractor between 175 and 250 horsepower, larger than any current Kubota tractors on the market.
Because Buhler ownership is controlled by the Russian parent company, only about 20 per cent of the float is available, and the stock is thinly traded at the best of times.
Still, the share price is down 19 per cent this year, closing at $2.80. That’s only a little higher than the company’s all-time low of $2.60, which it hit in early August, just ahead of its disappointing third-quarter results.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.