Stockfeed manufacturer Ridley Corporation has slipped to a $8.6 million loss after reporting a 3.5 per cent drop in sales revenue to $967.9m for the 2019-20 year.
It was an expensive year for the company which had to pay for a legal settlement and write down the cost of three mill closures as it restructured its processing operations.
Ridley also blamed the high cost of raw ingredients during the drought and the loss of a valuable supply agreement to poultry business, Ingham's Enterprises, for its 65,000 tonne downturn in feed and rendered product sales for the year.
Ingham's had opened a new feed mill of its own at Brinkley in South Australia last year, subsequently forcing Ridley to close its ageing Murray Bridge plant in October.
An overall drop in sales as a result of the COVID-19 pandemic added to Ridley's profit downturn.
The Murray Bridge closure, the restructure of milling operations in Victoria, including the closure of its Shepparton and Bendigo mills, and a $21.6m impairment against its slow performing Novacq aquaculture business contributed to $43.2m in significant items impacting on the full year result.
The significant items included a February settlement of legal proceedings with poultry company Baiada after agreeing to pay almost $2m over three installments, ending a dispute over feed it had supplied from its Wasley's mill in SA.
However, earnings before interest, tax, depreciation and amortisation lifted about 8pc to $64.3m compared to 2018-19.
Ridley spent $42.9m on capital projects during the year, including investing in production facilities at its Novacq feed additive in Thailand.
Managing director Quinton Hildebrand expected the company's growth strategy to deliver improved earnings in 2020-21.
He recently announced a focus on initiatives aimed at simplifying the business, including rationalising its supply chain and further automation plans.
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The story Ridley posts $8.6m loss after copping poultry customer costs first appeared on Farm Online.