Higher steel prices clip Buhler Industries' profits

Winnipeg Free Press
Sat Jan 22 2005

AN increase of as much as 100 per cent in steel prices clipped 21 per cent of profits from the bottom line of Buhler Industries for the first quarter of fiscal 2005 ending Dec. 31, 2004.

Company president and chief operating officer Craig Engel said the profit slippage was anticipated and the remaining three quarters of this year are not likely to experience the same depth of year-over-year profit declines.

"Our goal for this year was to keep the bottom line flat and grow the top line," Engel said in an interview yesterday. "We had an eight per cent revenue growth for the quarter and we are pleased with that."

Revenue was $45.8 million for the quarter compared to $42.3 million for the same quarter the year before.

Engel said Buhler Industries has been hit far harder by the increase in steel prices than by the increase in the value of the Canadian dollar versus the U.S. dollar.

"We believe that at least two-thirds of the earnings slippage is as a result of steel prices," he said, adding Buhler products have a high composition of U.S. parts -- some as much as 80 per cent -- creating a natural hedge.

About 61 per cent of last year's $206.1 million in gross sales was to the U.S. and Engel said that figure is rising.

Buhler shares closed unchanged at $7.40 in trading on the TSX exchange.