Subsidy mechanism for feed products awaited: DCF

10/03/2012 07:54 AST

Dhofar Cattle Feed (DCF) says it is awaiting details of a formula to be applied by feed manufacturers for calculating the subsidy on feed products. The subsidy came into force with effect from January 1, 2012, but its benefits have not yet accrued to the company for a want of a decision on the mechanism for its application, Hamoud bin Mustahail Ahmed al Mashani, Chairman of the Board of Directors, said.

"Considering the volatility in raw material prices, our Government has announced its plan to offer feed subsidy to feed manufacturers starting from 1st Jan 2011 and we are waiting for the mechanism for calculating the subsidy on feed products. The losses will be compensated once we start receiving the feed subsidy," he stated in the Chairman's Report on the company's financial performance during 2011.

Total revenues for the period under review was RO 22.50 million compared to RO 20.09 million in 2010. The gross profit however declined to RO 3.98 million compared to RO 4.59 million in 2010. The net loss was RO 0.211 million in 2011, against earnings of RO 5,124 million in 2010. However, the bottom line cannot be compared directly between two years due to the company's exceptional realised gain of RO 5.57 million on the sale of shares during 2010, it said.

"There has been a significant decline in our gross profit margin in the current year; as compared to the previous year even though the revenue has increased by 12 per cent mainly due to the abnormal increase in the raw material prices and the handing over of the leased land to the Ministry of Housing in June 2010. This resulted in the loss of production of fodder for our animals this year as well, and we continue to import feed where the cost is higher than domestic production. Soaring world market commodity prices has put pressure on our product margins," the Chairman stated.

Oman Daily Observer