Despite strong sales, Richmond's Tree Island Wire Income Fund (TSX:TIL.UN) reported a 33% drop in profit for its third quarter ending September 30.
Revenue rose to $73.7 million compared with $65.3 million in 2006's third quarter. Tree Island said the increase was due mainly to revenue generated from its US$18.5 million acquisition of Baoan International Investment Co., which owns and operates two wire products manufacturing facilities in Tainjin, China.
However, higher sales and administrative costs cut into the company's quarterly profit, which fell to $3.2 million from $4.8 million in 2006's third quarter.
The company expects continued challenges in the U.S. market in 2008 as the American housing market digs its way out of the sub-prime mortgage crisis. A strengthening Canadian dollar could also affect the company's U.S. exports.
Tree Island's share price range during the past week: between $5 and $5.15; 52-week high: $9; 52-week low: $4.90.