Vitarich slashes 2017 income target

MANILA, Philippines — Listed Vitarich Corp., one of the country’s pioneers in poultry and feeds manufacturing, has slashed its expected income for the year to P150 million from P300 million due to the bird flu incident during the second semester.

While the company will not be able to hit its original income target, the P150 million profit is still a huge jump from the P18 million it earned last year.

“We’re not gonna hit the P300 million mark but we will finish at around P150 million. Then we are expecting a 30 percent growth for 2018,” Vitarich president and CEO Ricardo Manuel Sarmiento said during the company’s yearend briefing yesterday.

“While we did not get infected and did not cull any chicken, there was a huge effect in the market  in terms of fear in consumers,” he added.

Net income reached P107 million in the first nine months, 21 times higher than the P5 million recorded a year ago amid lower input costs and lower prices of raw materials.

For 2018, Sarmiento said the company is setting aside P130 million for its capital expenditures, more than 60 percent higher than this year’s P80 million.

“This will largely be allotted for our warehouses and support for our feeds. We are looking at putting up our own feed mill plant in Central Luzon. Our main focus now is to develop more chicken-based products,” he said.

The feed mill with a capacity of 20 metric tons per hour is estimated to cost around P400 million and construction is expected to start mid-2018 and operational by the third quarter of 2019.

Sarmiento said Vitarich expects to get funding from banks as it will begin another round of debt-to-equity conversion and undergo quasi-reorganization.

“We already submitted a week ago and we are expecting a favorable answer from the SEC (Securities and Exchange Commission) in three to four weeks. Once that’s done, PSE (Philippine Stock Exchange) will issue the share and we can start the process of the quasi-reorganization,” Sarmiento said.

“It could take up to six months. Our target is for both to be done next year,” he added.

The debt-to-equity conversion, its second in four years, will be worth P400 million and will be done to eliminate the company’s remaining debt and restore financial equilibrium.