Moark-Land ‘O Lakes posts earnings
Company incurs $6.9 million loss due to decline in revenue from egg sales.
Reports for the quarter ending June 30, 2009, posted by Land ‘O Lakes Inc., owner of Moark Inc., reflect the impact of a 20% decline in average UB price of $1.24/dozen prevailing during Q2 of 2008, compared to $1/dozen during Q2 of 2009.
The egg-production subsidiary of Land 'O Lakes recorded sales of $119.8 million ($138.6 million in 2008) for the quarter, generating a loss of $6.9 million ($3.4 million in 2008). Gross margin for Q2 of 2009 attained 2.2%, a decline from 16.5% during the corresponding Q2 of 2008. Effectively revenue for egg sales decreased by 13.6% but with only a fractional increase in cost.
For the first six months of FY 2009, Moark generated a profit of $4.3 million compared to $43.3 million in the corresponding two quarters of FY 2009 combined.
Notes to the accounts revealed a $6.8 million decrease in unrealized hedging gains for Q2 2009.
The Moark egg operations represented 4.2% of total Land 'O Lakes sales of $2.81 billion in Q2. The 2.2% gross margin compares unfavorably with the 9.9% generated by the entire enterprise.