PROFITABILITY OF ANIMAL FEED AND FODDER MANUFACTURERS IN 2020-2024

Abstract

The enhancement of economic benefits is imperative for the sustained and efficient operation of companies. This phenomenon assumes particular importance in contexts characterized by uncertainty, such as during a pandemic or a state of war which give rise to the closure of trade routes and other economic activities. Therefore, it is imperative to comprehensively understand the factors influencing the profitability of companies operating in challenging economic environments, particularly those that import their primary raw materials from other continents. The objective of the present study was to compare the level of return on equity and to assess the changes that shape it in animal feed and fodder manufacturers during periods of economic uncertainty, taking into account company size and production profile. The study employed unpublished statistical data from the Central Statistical Office for the years 2020-2024. A modified Hawawini and Viallet model was employed to ascertain the determinants of profitability. The ratio analysis reveals that the level of return on equity during periods of uncertainty varied significantly, depending on both company size class and business profile. Contrary to the assumptions made in the extant literature, small manufacturers of pet food were characterized by higher profitability. Furthermore, their profitability levels were driven by faster asset turnover and a higher share of debt capital. In the context of large feed mills, the primary factor influencing the return on equity (ROE) was the return on sales.