Vitarich profit drops by 85% in 2023

Listed poultry and feed manufacturer Vitarich Corp. saw its earnings plunge by 85 percent to P13.3 million in 2023 due to lower gross profit and higher expenses.

In a disclosure to the Philippine Stock Exchange, Vitarich said its net income was P76.3 million less than the P89.6 million recorded in 2022.

The company attributed the lower earnings to the “decline in gross profit combined with higher operating expenses mainly from increased labor costs.”

“The company is implementing efforts to strengthen a more resilient business model to deliver its long-term business and financial goals,” the company said.

“These initiatives include stronger marketing and brand support, capability investment, and increased visibility in modern trade channels which are expected to drive top-line growth and gross margin expansion,” it added.

Vitarich said its revenues inched up by 4.4 percent to P12.5 billion from P11.97 billion.

The company said its food segment, which accounted for more than half of its revenues, grew by 11 percent to P6.9 billion from P6.2 billion.

The double-digit increase was attributed to the 14-percent volume expansion, driven by demand in Luzon and Visayas despite price pressures amid a chicken meat supply glut in the market.

Meanwhile, Vitarich said its feeds segment retreated to P5.12 billion from P5.19 billion as decline in volume sales outpaced the increased in its prices.

According to Vitarich, the slight contraction in its feeds segment was caused by multiple factors: increase in selling prices due to inflation, lower demand for hog feeds as a result of the spread of African swine fever, and “depressed” chicken prices that lead to “dampened” demand for broiler feeds.

“Farms segment accounted for three percent of revenues, reflecting a 20-percent decrease to P424.4 million as a result of overall market conditions,” it said.

“A fair value changes on biological assets amounting to a loss of P47.8 million was recognized as part of revenues based on lower estimated selling price of chicken in the market,” it added.

The company’s gross profit contracted by 19 percent to P904.5 million as its cost of goods rose by six percent to P11.6 billion due to higher production costs.