Vitarich losses widen in ’02

Vitarich Corp., one of the country’s leading integrated producers and wholesalers of polutry and animal feed products widened its losses last year to P783.14 million or six times the P115.86 million loss incurred a year earlier.

Financial statements submitted to the Securities and Exchange Commission showed the company’s consolidated net revenues dropped by 16.2 percent to P5.12 billion compared with the previous year’s P6.11 billion. This was mainly due to the drop in poultry prices which remained as the biggest contributing factor to the decrease in operating profits. The chicken operations accounted for 64 percent of total sales.

Throughout the year, the company was hounded by oversupply in the market and the continuing influx of cheap imported chicken leg quarters. Although sales volume of chicken increased from the previous year, depressed prices and higher production costs pulled down these gains.

"The current economic, security and political situation in the country, and globally as well, still looms as a major deterrent to the company’s achieving operating income. The significant plunge in the overall operating performance of the company resulted to a net loss, affected greatly by interest expense incurred by the company from its long-term debt," Vitarich said.

Total interest charges amounted to P347 million, lower than last year’s P365 million. Operating expenses, on the other hand, increased by 27 percent to P735 million, largely due to the write-off of P105 million in losses brought about by the closure of its restaurant operation, Texas Chicken.

As in the previous years, Vitarich took measures to survive in the highly difficult business environment. It was constrained to further downsize its operation to a level it can support given its limited working capital. A substantial reduction of its placements with contract breeders was also effected.

The company likewise closed down its central hatchery in Luzon in March 2002 to reduce overhead costs as well as free up the working capital. It will continue to undertake measures to further improve productivity and efficiencies and also continue to implement its manpower rightsizing program. – Zinnia Dela Peña