CPF's income from overseas investments boosts Q1 sales, while net profit soars 40%
Charoen Pokphand Foods (CPF) and its subsidiaries on Monday reported consolidated first-quarter revenue of Bt125.286 billion, up 4 per cent from the same period last year.
The rise was due mainly to increased income from the listed food group’s overseas investments, which accounted for 67 per cent of sales, with the remainder coming from domestic business, according to the company’s report to the Stock Exchange of Thailand.
First-quarter net profit, meanwhile, skyrocketed by 40 per cent year on year to Bt4.279 billion.
The rising profit derived mainly from improving pig business in Vietnam, Thailand and Cambodia, following a significant price slump due to oversupply during the first quarter of last year.
However, the situation now has returned to normal, CPF said, thanks to well-managed production efficiency, which had also raised the company’s overall year-on-year gross profit margin to increase from 9 per cent to 14 per cent in the first three months of the year.
Sooksunt Jiumjaiswanglerg, chief executive officer for Agro Industrial Business and co-president of CPF, pointed out that an outbreak of African swine fever (ASF) outbreak in Vietnam could affect pork prices in the area.
Farmers would rush to sell pigs over worries about the virus, which would initially cause an oversupply problem on the market.
However, the outbreak will then decrease pig supply in affected areas, which will pull up prices due to the resulting shortage, the CEO explained.
More broadly, the company expects to achieve its annual goals this year, with improved performance compared to last year, despite fluctuations in the price of pork in the Vietnamese market due to ASF, he added.
In terms of investment, CPF is focusing on business expansion and value-added products, such as via the acquisition of HyLife, a Canadian pork producer.
The HyLife investment, which will allow CPF to access premium pork markets such as Japan and China, is expected to be completed in the fourth quarter of this year, Sooksunt said.
The company sees opportunity to grow from overseas operations, such as those in China, Vietnam, Russia, the United States and the Philippines.
CPF’s revenue target is to reach Bt800 billion through growth of 6-7 per cent per year in the next five years, while overseas sales will account for 75 per cent of total sales in that timescale, the chief executive said.