Buhler Industries reported its earnings on Dec. 29 for the year ending Sept. 30, 2015. Revenues and net earnings were both down for the farm equipment manufacturer. Revenues were down by $79.8 million while company reported a net loss of $5.3 million.

Revenue

Revenue for the year was $245.7 million, down $79.8 million from $325.5 million reported in 2014. Weak commodity prices and the unstable political environment in Eastern Europe continue to contribute to reduced sales levels for the Company. Sales in Canada were flat over 2014, whereas sales to the U.S. and Eastern Europe have declined significantly.

Net Earnings Down for the Year

The net loss for the year was ($5.3) million, compared with last year’s profit of $12.5 million. The decrease in margin was the main driver, along with lower gains in foreign exchange and higher selling and administration costs. Partially offsetting the losses were gains resulting from decreased amortization from reduced capital spending, lower interest expenses resulting from the repayment of long-term debt and recoveries of income taxes relating to prior years.

Looking Forward

Demand for agricultural equipment is expected to be weaker in 2016 as a result of lower commodity prices and this will continue to have an unfavorable impact on Buhler sales and profitability in 2016. Export sales to Eastern Europe have also been negatively impacted by lower commodity pricing and general economic uncertainty in the region. During the year, inventory levels have dropped and are expected to drop again in 2016. Gross margin and operating margin are expected to be lower due to lower sales and production volumes. In addition, increased competition for equipment sales will lead to lower margins due to additional sales programs being added, however, the increased strength of U.S. dollar in 2016 will provide some relief to the declining margins.