Cyanotech increases prices on rising costs

Microalgae supplier Cyanotech has said it plans to increase the prices of its ingredients as it can no longer offset the rising input costs to the business.

The maker of ingredients for nutritional supplements and cosmeceuticals took the decision despite recording a marked improvement in financial performance

Fuel and energy costs hurt​

“After careful evaluation, we have determined that we can no longer absorb fuel and energy increases, especially being located in Hawaii, which has some of the highest energy costs in the world,”​ said Cyanotech president and CEO Andrew Jacobson.

Jacobson said the price increases would be implemented by the middle of the third quarter.

The price hikes will defend the company’s profit figures, which are looking healthier in the latest quarter. For the three months ending June 30, net income for the first quarter increased to $271,000, compared to a net loss last year of $382,000.

This improvement, said the firm, was primarily due to increased sales and a reduction in operating expenses.

Astaxanthin prices rises 49 percent​

Natural astaxanthin, which is used in sun care, was a major contributor to the sales growth with bulk product sales increasing 49 percent on last year.

Jacobson said in a statement: “The team really pulled together with improvements in all aspects of the business, including production. Our recent accomplishments in no way suggest we have turned our issues around, but they do show momentum toward continued improvement.” ​

However, despite the firm’s improved performance, it will still be passing on some of the increased costs to its customers.

“We expect continued pressure on input costs going forward and this could cause margins to decline in future periods. As everyone is aware, rising fuel and energy costs have taken a toll. This issue is not unique to Cyanotech Corporation,”​ said Jacobson.