Listed poultry integrator and animal feed manufacturer Vitarich Corp. expects to raise its breeder farm output by as much as 8 percent under a Memorandum of Agreement (MOA) with Broilers Club, Inc. (BCI).

Vitarich Corp. said in a stock exchange disclosure on Tuesday that its Board approved an agreement on 1 September to buy breeder farm facilities in Davao del Sur — including land, equipment, 125,000 shares, and shareholder advances in Broilers Club, Inc. — for up to P280 million.

The transactions will be subject to due diligence, which will begin upon signing the MOA and must be completed within 90 days of BCI and its shareholders submitting all required documents.

“If the conditions are fully satisfied and the intended transactions eventually materialize, the above-mentioned facilities will be used as VITA’s breeder farm, while BCI will become a subsidiary of VITA,” the disclosure read.

Vitarich added that the deal is not expected to negatively affect its operations.

“Rather (assuming conditions are met), the transaction is a strategic step to the current breeder farm operations of VITA. The additional capacity is expected to produce as much as an 8 percent increase in total VITA breeder output,” the company said. 

Vitarich sells chicken and dory fish to hotels, restaurants, supermarkets, and wet markets nationwide.

In the first quarter of the year, the company reported a net income of P241.6 million, surging from just P620,959 a year earlier. 

Revenues rose to P3.2 billion from P2.9 billion, boosted by higher nationwide chicken prices and a new revenue stream from day-old pullets.

Gross profit more than doubled to P607.5 million, while operating profit jumped to P349.8 million from P24.1 million despite higher freight, salaries, and marketing expenses.