AUSTRALIA’S biggest stockfeed miller Ridley Limited has reported a net profit after tax of $25 million for the year to June 30, a turnaround from the $11M loss recorded in FY20.
In results released last Wednesday, the company’s operating cash flow at $82M is up 43 per cent on the FY20 result.
Earnings before interest, taxes, depreciation and amortisation in its bulk stockfeeds segment at $32.5M were down 5pc from $34.3M in FY20, partly because of the return to improved seasonal conditions.
“Beef and sheep sales remain below the record drought-feeding levels of FY20 with the return to normal on-farm pasture,” the company said in its presentation.
Monogastrics account for 80pc of Ridley’s bulk stockfeed earnings, and the company said it saw a 10pc growth in volume in this segment in the 12 months to July 2021.
Ridley said it was increasing its market share with pig and poultry customers, and its new Wellsford mill was transitioning to seven-day operation from this month.
Wellsford near Bendigo opened in August last year, and is the company’s biggest feedmill.
Its construction has allowed Ridley to close the smaller Mooroopna mill near Shepparton.
Feeds earnings lift
EBITDA for Ridley’s packaged feeds and ingredients segment at $46.5M rose 32pc from $35.1M in FY20, and benefitted from strong branded packaged sales in traditional rural distribution channels and new product lines in urban pet specialty chains.
This segment includes aquafeed, and Ridley said a 20pc expansion in capacity at its dedicated Narangba facility in Brisbane was completed in July, with its higher volumes expected to lower operating costs per tonne.
However, aquafeed margins were impacted in FY21 as Ridley sought to grow volumes in a market with surplus feed-production capacity, and a small loss from Novacq following the start of its commercial operations in Thailand on 1 July, 2020.
On August 2, Ridley finalised the sale of its Tasmanian aquafeed plant at Westbury to Skretting, and this will eliminate the drag of its under-utilised operations on Ridley earnings.
New customers targeted
As part of its growth strategy, Ridley will be rationalising its supply chain with improved scheduling and asset utilisation, and establishing Ridley Direct.
The Ridley Direct initiative is targeting an equivalent of 5pc of bulk stockfeeds weekly volume by FY23 through an ingredients sales desk selling to livestock producers including dairy farmers who mix their own feed.
Ridley Direct will target new customers who can access Ridley’s existing team of nutritionists, and aims to leverage procurement scale.