July 9, 2008 / 4:20 PM / 10 years ago

UPDATE 1-Richelieu profit up on lower costs, higher C$

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OTTAWA, July 9 (Reuters) - Second-quarter profit at Richelieu Hardware Ltd (RCH.TO) rose 5 percent despite declining sales, the distributor of specialty hardware said on Wednesday, lifted by lower raw material costs and a stronger Canadian dollar.

Richelieu, which also produces kitchen cabinets and doors, said earnings grew to C$9.1 million ($9 million), or 40 Canadian cents a share, from C$8.6 million, or 37 Canadian cents a share, in the same period last year.

Revenue in the three months ended May 31 dropped 1.3 percent to C$114.8 million.

Sales in the United States fell 3.7 percent on a U.S. dollar basis and 14.3 percent after conversion to Canadian currency. Sales in Canada grew 1.8 percent.

The Montreal-based company said its net profit margin rose to 7.9 percent from 7.4 percent. Earnings before interest, tax, depreciation and amortization increased 1.3 percent to C$15 million and the EBITDA margin was 13 percent compared with 12.7 percent a year earlier.

“While they hold further challenges, current economic conditions could also bring various opportunities that we should be able to seize thanks to our leadership and financial position. We continue to analyze acquisition projects,” said Chief Executive Richard Lord in a statement.

Shares in Richelieu slipped 13 Canadian cents to C$19.45 on the Toronto Stock Exchange on Wednesday. So far this year, the stock has dropped about 20 percent. ($1=$1.01 Canadian) (Reporting by Susan Taylor; editing by Rob Wilson)

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