Winnipeg farm equipment manufacturer Buhler Industries is reducing its workforce and paring back production ahead of an expected drop in farm incomes.
The company, whose brands include Versatile tractors and Farm King implements, announced its first-quarter financials Friday for the period ending Dec. 31, booking net profit of $1.5 million on fourth-best quarterly revenue of $60.1 million.
Q1 profit was down from $4.7 million on $68.9 million in revenues in the year-earlier period, due mainly to decreased margins from “competitive pressures, increased selling and administration expenditures combined with foreign exchange losses,” the company said.
Further, Buhler said it expects to see a “continued decline” in sales this year due to lower commodity prices. Judging by the current trend, the company said, prices will result in reduced farm income levels.
Russian-owned Buhler’s export sales into Eastern Europe have also dropped on weaker commodity pricing and political uncertainty in Russia and Ukraine, the company said.
The company said Friday it has made “workforce adjustments” which in turn are expected to cut the company’s production levels.
Lower production, in turn, will lead to improved cash flow as inventory levels decline throughout 2015, Buhler said.
Asked to put a number to the level of layoffs, the company replied Tuesday that it wouldn’t comment on the reduction in workforce.
Buhler said it also “continues to pursue new markets and products” such as its new DeltaTrack tractor line, which it said has helped offset the softer machinery market.
Furthermore, the company said, given the strengthening in the U.S. dollar so far in 2015, sales in U.S., dollars are expected to have better margins.
Those sales, in turn, are expected to help offset some expected margin loss against increased sales competition. — AGCanada.com Network