(Reuters) -Venky’s India posted a nearly 79% drop in first-quarter profit on Friday, as its poultry business margins shrank, with over-supply and curtailed demand leading to lower pricing.
The poultry firm reported a net profit of 158.3 million rupees ($1.81 million) in the quarter ended June 30, compared to last year’s 751.8 million rupees.
Venky’s poultry and poultry products business has been impacted for months by lower market pricing of broiler birds.
Panic selling drove down prices during an April heatwave, over concerns about the birds’ mortality rate in hotter conditions, Venky’s said in a post-earnings call in May.
Firms such as Venky’s are also impacted seasonally, usually during the second and third quarters, when multiple Hindu festivals limit meat and egg consumption, which can lead to a months-long overhang, the company has said.
Revenue in the poultry and polutry products segment fell 7.4%, resulting in a loss of 56.6 million rupees from the category, compared to a year-ago profit of 827.4 million rupees.
Revenue in Venky’s second largest oilseed segment grew 33.6%, aided by firmer pricing of soya and decent demand, the company said.
Venky’s processes soya to make edible oil, which it sells in bulk to traders, and de-oiled cake, which it sells as poultry feed to manufacturers.
Its overall revenue rose 7.1%, helped by the growth in the oilseeds segment.
However, expenses rose more than 19%.
The company is also foraying into ready-mix spice powders, production for which began in the first quarter.
(Reporting by Ananta Agarwal in Bengaluru; Editing by Ronojoy Mazumdar)
