Bairaha Farms December profit up 43% over healthy sales

Sri Lanka’s pioneer chicken processing firm, Bairaha Farms PLC, posted a net profit of Rs.14.82 cents a share or Rs.237.1 million for the December quarter (3Q17), which generally sees higher sales due to festive demand.  
According to the interim financials filed with the Colombo bourse, the poultry firm increased its net profit by as much as 43.2 percent from a year ago on sales of Rs.1.13 billion, which grew by little 
under 7percent. 
For the nine months ended December 31, 2017, the group made a net profit of Rs.38.48 a share or Rs.615. 7 million, up 36 percent year-on-year (YoY). The sales grew by a healthy 11 percent YoY to Rs.3.26 billion. 

Chicken has long been a price controlled item in Sri Lanka. According to analysts, price controls have weakened the local poultry industry’s potential 
for growth.
Bairaha Farms CEO Yakooth Naleem sees immense potential to expand the local poultry sector as the per capita poultry consumption is around 9 kilograms—relatively low compared to most of the East Asian countries.The regulations on the poultry industry were further tightened when the budget 2017 said the chicken farmers must sell at least 40 percent of their produce in the ‘whole chicken’ form at the controlled price of Rs.420. Finance Minister Ravi Karunanayake then threatened to import poultry if price controls were not adhered to.
The chicken farmers were earlier selling chicken parts at market prices to bypass the controlled price as they were hit by supply side constraints relating to higher cost of animal feed.  
Sourcing of raw materials for animal feed has long been a challenge for Bairaha Farms as well as for the industry in general because animal feed has to be imported at higher prices due to delays in 
obtaining permits. 
“Our suggestion is to guarantee a mutually-agreed reasonable price to the local maize farmers so that the entire Maha maize crop could be purchased directly by the feed-millers. Thereafter, feed-millers should be permitted to import the balance requirement before the next Maha season, without authorities imposing any undue restrictions,” Bairaha Farms Group Chairman, Prof. M.T.A. Furkhan stated. 
Bairaha Farms in June commissioned a new feed-mill as a joint venture. The feed-mill is expected to allow the company to have the total integration in the poultry production operations.