The Board of the Singapore-based Japfa Ltd., a vertically integrated producer of poultry, pork and aquaculture products, has declined to comment on a recent report on its future privatization.
According to Singapore Business Review, the company responded to its inquiries with a statement.
“The family are regularly engaged in exploratory discussions regarding various corporate actions, including ones both similar and different to what is currently being reported on,” according to the statement.
“If any of the discussions become definitive,” it continues, “the family will comply with all relevant legal obligations and make the required announcements.”
Recently, Bloomberg reported that Japfa Ltd. had discussed a loan of US$S150 million with several banks and one private credit fund. It continued that the potential delisting of the company was being considered.
Revenue up, profitability tumbled in 2023
Last month, Japfa Ltd. reported its results for the fiscal year ending December 31, 2023.
At almost US$4.43 billion, 12-month revenue was up 1.5% year-on-year. However, profitability was hit by constrained consumer purchasing power across all of its markets, according to Japfa Ltd.
For the full 12 months, operating profit was 23.6% lower year-on-year at US$118.8 million, and operating profit margin was down by 0.9 points at 2.7%. At just under US$238 million, earnings before interest, taxes, depreciation and amortization (EBITDA) was 11.5% lower than in the 2022 financial year.
These results were mainly attributable to a weak first half of the period, the company reported.
Among the key developments it highlighted was a positive core profit after tax and minority interests (PATMI) without foreign exchange adjustment of US$21.2 million in the second half of 2023. This came after a negative figure of US$49.3 million for the first six months of the year.
Furthermore, operating profit for the first half of 2023 of just US$3.8 million was followed by more than US$115 million for the next six-month period.
Driving these positive developments over the latter period were higher feed margins in most of its markets, lower production costs for its Vietnamese swine operations and increased selling prices for colored birds in Vietnam.
To reduce the impacts of adverse market changes in the first six months of 2023, CEO Tan Yong Nang said the group focused on streamlining operations in its Indonesian poultry and Vietnamese animal protein businesses.
“This approach has yielded positive results, and we are encouraged by the continued progress we are making in recalibrating growth,” he said. “Looking forward, we remain confident in our ability to readily harness the ups and downs of the market, and capture the long-term growth potential for protein consumption in Emerging Asia.”
More on Japfa Ltd.
According to the company’s website, Japfa Ltd. is a leading vertically integrated agrifood company.
Since it was founded in 1971, the company has expanded, becoming a leading producer of poultry, pork, and aquaculture products in Asia. It has operations in Indonesia, Vietnam, Myanmar and Bangladesh.
Ten years ago, Japfa Ltd. was first listed on the Main Board of the Singapore Stock Exchange.
With annual production of more than 636 million chickens, Japfa Ltd. is the fourth largest poultry producer in Asia, according to WATTPoultry.com’s Top Poultry Companies survey.
In 2022, it was reported that the firm had carried out successful tests on an automated weight collection and prediction tool for poultry in Indonesia.
