Mar 2009 Financial News

Improved margins expected for Roberts, Pinnacle Feeds

Mar 11, 2009

CEO of the Barbados Shipping and Trading Company Limited (BS&T) G. Anthony King is anticipating improved margins by both Roberts Manufacturing Company Limited and Pinnacle Feeds.

At the same time, he is revealing that the installation of equipment at Pinnacle Feeds will result in greater efficiencies at the company.

These are two of the many companies whose operations in 2008 are highlighted in the recently released BS&T annual financial statements.

The operations of both companies were affected by what King called higher energy costs, and in the case of Pinnacle, increased freight charges, with the result being that the margins for both were lower.

King said that throughout the year under review, Roberts Manufacturing faced increased costs with all of its packaging and raw materials for its margarines and oil.

Coupled with the unprecedented rise in energy prices, King said, gross margins were eroded as all costs could not be passed on to the consumer.

According to the CEO, “towards the end of the year, new equipment was installed which will allow for better control and consistency in the processing of the finished product with increased capacity.”

He noted as well that a comprehensive review of costs and production has been done in order to rationalise product lines and pricing.

“Lower raw material costs are expected in 2009, which should allow margins to somewhat recover,” he noted.

Dealing with Pinnacle Feeds, King stated that the company experienced further escalation of grain prices resulting primarily from the demand for grain for the production of bio-fuels.

He said too that increases in freight and soaring energy costs eroded the company’s gross margins. “Feed price increases had to be constrained in the face of the ability of the farmers to absorb increases and the government’s drive to moderate consumer prices,” said King.

He noted that although grain prices have since been reduced, these will affect inputs only in the early months of 2009 as grain purchased prior to the fall in prices through forward contracts, has to be consumed.

He added, “the installation of certain replacement equipment in September 2008 and January 2009 will assist by providing greater production efficiencies and also, a comprehensive review of formulation and production costs has been done.” (JB)


Source:
Barbados Advocate
Wednesday March 11, 2009

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=2432