For the second quarter alone, losses amounted to P30.14 million compared with the P119.37-million net loss in the same period last year.
Total sales during the period fell nine percent from P2.2 billion to P2.1 billion. Second quarter sales likewise decreased by nine percent to P1.1 billion, largely due to the sudden drop in volume of poultry as a result of the company’s deliberate move to reduce its poultry business.
While production costs remained high due to the increasing cost of feed ingredients, selling prices dropped as a result of cost-competitiveness in the market. Given the still depressed chicken prices during the second quarter, Vitarich recorded an operating loss of P6.7 million, 75 percent higher than the same period last year.
On the other hand, operating expenses declined 41 percent due to the continuous implementation of cost-saving measures such as keeping strict control of operating expenses, contracting out of facilities that could no longer be operated efficiently to third parties, and disposing of idle foreclosed properties.
Vitarich said its restructuring plan will allow it to re-channel its resources and strengthen its feeds business both for farms and aquatic animals.
Second quarter cash balance slid to P41.6 million from P114.4 million as of end-2003 due to payments of financing charges worth P70.1 million to creditor-banks. The reduction was also attributed to net cash outflows used in operating activities, particularly for working capital requirements.
Philippines Favorite Chicken Inc., a subsidiary of Vitarich and the exclusive distributor of Texas Chicken Restaurant in the Philippines, registered sales revenues of P35 million or an increase of 15 percent from the previous level due to aggressive marketing campaigns. The increase was also attributed to the closure of non-profitable branches, leaving only six operational stores.
Gromax Inc., another subsidiary of Vitarich, yielded positive results for the second quarter as it registered sales revenues of P22.6 million. Operating expenses likewise decreased by 22 percent as a result of the company’s cost-cutting measures.