US: Cagle's reports loss as bird flu fears hit
Cagle's has seen its profits erode as the poultry product company suffered on the back of fears of Avian Influenza.
For its full fiscal year, the company reported a loss of US$0.5m or $(0.12) per diluted share compared to a profit of $11.5m or $2.43 per diluted share for fiscal 2005.
Net sales for fiscal 2006 declined 3.7% despite an increase in pounds marketed of 12.9%.
"The average market price for our products in fiscal 2006 decreased 18.7% from fiscal 2005. As a result of the additional pounds marketed, cost of sales increased 4.6%," said J Douglas Cagle, chairman and CEO.
"However, cost of sales on a per pound marketed basis decreased 7.3% influenced by lower feed cost of 9.89% and various company wide operational efficiencies. This decrease was especially notable given the higher cost of energy and transportation experienced in fiscal 2006."
He continued: "The fear of Avian Influenza abroad continues to impact our industry and company. Cagle's participates in numerous preventive programmes, both on the state and federal level, and has taken comprehensive measures at our facilities including testing of all flocks prior to slaughter as well as increased biosecurity to ensure against this disease.
"We continue to explore marketing opportunities available as a result of the company's focus on tender, smaller broilers. We believe that being fully dedicated to this small broiler programme will allow us to better serve our target market segment of delicatessens and fast food providers as well as position the company for a quick return to profitability as protein prices recover."
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