Buhler turnover drops

buhler farm king
Buhler maker of Farm King and Versatile ag machines that are sold in Australia.

Canadian Buhler maker of Versatile tractors and Farm King equipment has reported a revenue for the year was CA $245.7 million, down CA$79.8 million from CA$325.5 million reported in 2014. Source: AFDJ eNews

According to the company weak commodity prices and the unstable political environment in Eastern Europe contributed to reduced sales levels.

Sales in Canada were flat over 2014, whereas sales to the US and Eastern Europe declined significantly.

The net loss for the year was (CA $5.3) million, compared with last year’s profit of CA $12.5 million.

The decrease in margin was the main driver, along with lower gains in foreign exchange and higher selling and administration costs.

Partially offsetting the losses were gains resulting from decreased amortization from reduced capital spending, lower interest expenses resulting from the repayment of long term debt and recoveries of income taxes relating to prior years.

Demand for agricultural equipment is expected to be weaker in 2016 as a result of lower commodity prices and this will continue to have an unfavorable impact on Buhler sales and profitability in 2016.

During 2015 inventory levels dropped and are expected to drop again in 2016. Gross margins and operating margins are expected to be lower due to lower sales and production volumes.

In addition, increased competition for equipment sales will lead to lower margins due to additional sales programs being added however, the increased strength of US dollar in 2016 will provide some relief to the declining margins.