A subsidiary of UAC of Nigeria Plc,
Livestock Feeds Plc, has said it is restructuring its operations for an
improved performance against the backdrop of an extremely challenging
economic and business environment.
The Chairman of the company, Mr. Larry
Ettah, in his address at the company’s Annual General Meeting in Lagos,
said, “The company recorded revenue of N8.9bn, which is a growth of 13
per cent over 2014.
“However, due to the prevailing tough
and difficult operating environment, cost of sales increased by about 16
per cent over 2014 leading to a profit before tax of N300m, a 25 per
cent decline on 2014. In the same vein, profit after tax declined by
about 26 per cent to N187.9m.”
Ettah stated, “Fellow shareholders, you
will recall that our company paid a dividend of N0.10 per share on the
2014 results after several years of non-payment of dividend. This was
done to reward shareholders for their steadfastness in keeping faith
with the company through the lean years.
“However, in view of the 2015 results
and the need to conserve funds to fund the growth plans and working
capital of the company in 2016, the Board of Director has not
recommended payment of a dividend for your approval. We are hopeful
that dividend payment will resume shortly.”
On the feed milling industry, the
chairman said the project encountered acute shortage of the major raw
materials of maize and soya bean meal; of which the prices of the
products increased by 40 per cent in the course of the year, leading to
increased cost.
The chairman added, “The acute shortage
of foreign exchange and the worsening exchange rate also affected our
business as importation of certain ingredients became difficult and
expensive. All these increased costs which could not be recovered
through price increases led to shrunken margins in the industry.
He said acute shortage and production of
poor quality day-old chicks by hatcheries affected the ability of
farmers to restock birds, adding that the breakout of the dreaded avian
influenza in the first month of the year, which was thought to be an
epidemic that would soon fizzle out, proved to be a major setback in the
industry as it persisted for the better part of the year.
The disease, he explained, ravaged many
farms all over the country leading to cull ing of millions of birds and
further worsening the decreased poultry population as most of the
affected farms were yet to restock.
In addition, he said the industry
suffered severe egg glut and weak prices of poultry products leading to
the inability to recover the increased costs of yields.
“This led to the shutdown of many poultry farms as the business was considered to be unprofitable,” he stressed.
On the outlook for 2016, the chairman
stated that, “The reoccurrence of Avian Influenza disease especially in
the northern part of the country is a cause for concern. We therefore
call on all relevant bodies such as Veterinary Council of Nigeria,
Nigerian Institute of Animal Science, Ministry of Agriculture, Federal
Department of Livestock, and other regulatory bodies saddled with the
responsibility of managing the sector to step up actions and campaigns
against the spread of the disease.”
“The control and prevention models of
other countries should be studied and adopted where necessary. We must
ensure sustainable growth of the poultry industry as it remains a quick
and relevant enterprise for poverty alleviation in Nigeria,” he said.
By Stanley Opara/Punch
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