CPF reports double-digit growth in overseas sales

For the latest half-year, CP Foods has achieved a 45% jump in net profits year-on-year, with a growing contribution from its overseas businesses.

(Charoen Pokphand Foods)
(Charoen Pokphand Foods)

For Thailand-based agri-food conglomerate Charoen Pokphand Foods PLC (CPF), net profits for the first six months of 2020 were 12.139 billion baht (THB; US$386 million).

This represents an improvement of 45% from the previous year, according to CPF.

The main driver for this growth was the widespread outbreaks of African swine fever (ASF) in Asia. Another significant contributor was strong performance by the firm’s aquaculture business in Thailand, which has recently undergone operational restructuring.

Improved sales by CPF’s overseas continues the trend over the past decade, said CPF chief executive officer Prasit Boondoungprasert. In particular, he identified the pork shortages that resulted from widespread ASF outbreaks in Vietnam as a key factor driving growth of the business. Meanwhile, restructuring of CPF’s aquaculture business in Thailand delivered greater profitability, he said.

At more than THB281.9 billion, CPF’s overseas sales revenue for the half-year was 9% higher than the same period of 2019. Through its businesses in 16 countries, the firm achieved year-on-year growth of 12% in sales revenue. These operations delivered 69% of sales revenue, CPF reports.

Contribution from the firm’s domestic businesses was up by 2%. Through national distribution and exports, the Thai operations now account for 39% of sales revenue, according to the company.

Revenue by business segment

For the six months ended June 30, CPF’s livestock business division generated revenue of just under THB245.3 billion, which compares with almost THB222.0 billion for the same period of 2019. At THB118.8 billion and THB84.6 billion, respectively, the firm’s animal farm products and animal feed businesses achieved year-on-year increases in reportable revenue. However, the processed foods and ready meals sub-sector reported a dip in revenue to a little over THB41.9 billion.

Over the same period, the company’s aquaculture business division generated lower revenue at THB36.6 billion (THB37.2 billion for the first half of 2019). While the contribution of this sector’s animal feed business was lower than last previous year at THB21.1 billion, the other sectors increased their revenues. For the latest half-year, the figures were THB12.1 billion from animal farm products, and THB3.4 billion from processed foods and ready meals.

COVID-19 impacts on CPF

Main impacts of the coronavirus (COVID-19) pandemic on CPF’s business were on its reduced purchasing power and the general economic situation, according to Prasit Boondoungprasert. As the firm’s products are essential for everyday life, he said that CPF had experienced “mild impacts” on its business.

In response to the pandemic, CPF utilized more technology, and adjusted its operational and sales formats as the situation changed.

Prospects for the second half of 2020

CPF expects to deliver “impressive” results for the full year, according to the CEO.

As result of the continued high pork prices in Asia, and growth of its aquaculture business in Thailand, CPF is forecasting record annualized net profits for 2020. Furthermore, CPF is prepared to take advantage of added values and investment returns, while the company expects consumption to recover.

More on CPF

CPF’s major shareholder is Charoen Pokphand Group Co., Ltd. of Thailand.

As a result of the pandemic, CPF is reported to be among the Thai meat producers maintaining its alert against COVID-19.

In recent months, the company has confirmed its commitment to animal welfare standards in its livestock and aquaculture value chains.

With annual slaughterings of 685 million birds, CP Group is in 6th position in the WATT AgNet World’s Top Poultry Companies database.

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