ECONOMYNEXT – Sri Lanka's Bairaha Farms Plc, which has breeder farms and also sell meat and value added products has reported profits of 74 million rupees in the September 2017 quarter, down 71 percent from a year earlier, while revenues also edged lower.
The group reported earnings of 4.68 rupees per share for the quarter. In the six months to September Bairaha reported earnings of 11.94 rupees per share, on total profits of 190 million rupees, which were down from 378 million a year earlier.
Total revenues fell 8.5 percent to 1,068 million rupees in the September quarter but cost of sales rose 5.8 percent to 825 million rupees, shrinking gross profits 37 percent to 243 million rupees.
A company official said chicken demand has slumped in recent months, spreading from the live bird market to day-old-chicks.
The poultry industry goes through a downward cycle, especially after Sri Lanka's central bank prints money, creating currency collapse, which then pushes up inflation reducing disposable incomes, economic analysts say.
Demand eventually picks up as salaries adjust upwards, and workers regain lost income from currency depreciation.
Most of Sri Lanka's branded dressed chicken prices are held at 420 rupees a kilo and have not moved down. A faster adjustment of prices could boost demand, analysts say.
The industry at one time had price controls but they have now been lifted. (Colombo/Nov01/2017)