Ferreyros' 33% Q3 Revenue Increase Offset By Rising Costs

The Peruvian industrial company Ferreyros (FERSF.PK) reported a net income for the quarter ended September 30 of PE$31.5 million (US$10.3 million), down (-9.6%) from 3Q '07, in spite of strong growth in revenues. Ferreyros reported higher sales and better margins for the quarter ended September 30, with sales up 23.9% and gross margin up 1.8 percentage points. The result was total revenues of PE$140 million (US$45.75 million) for the quarter, an improvement of 33.3% from 3Q '07.

The improvement was offset by a PE$14.2 million (US$4.6 million) increase in sales and administrative costs, which arrived at PE$76 million for the quarter.

In addition, the company had a currency loss of PE$5.44 million (US$1.78 million), which contributed to a net result of PE$31.5 million (US$10.3 million), down (-9.6%) from PE$34.8 million in 3Q '07.

Exchange rate effects have been a joker in the company's results lately, with a positive contribution of PE$10.7 million (US$3.5 million) in 3Q '07, a negative income effect of PE$(-41.8 million) in 2Q '08, and now a negative impact of PE$5.44 million in the latest quarter.

The company's balance sheet as of September 30 showed PE$791 million short-term, and PE$487 million of long-term debt, and total equity of PE$542 million, which represents a S.T.Debt/Equity-ratio of 1.46.

Ferreyros' shares are traded at Lima Stock Exchange [FERREVC1]. The current share price of PE$2.10 (US$0.69) reflects a YTD performance of (-66.6%). The ADR ratio is 1:20.

Ferreyro's latest interim statements can be found in our download section.