CPF records hefty profit of B7.47bn
published : 14 Nov 2020 at 04:00
newspaper section: Business
Charoen Pokphand Foods Plc (CPF) reaped 7.47 billion baht in net profit in the third quarter of 2020, a 23% year-on-year increase, boosting its nine-month profit to 19.6 billion, which grew 36% from the same period last year.
Earnings before interest, taxes, depreciation and amortisation jumped 87% year-on-year to 61.7 billion baht, the highest in the company's history.
Major contributors were the African swine fever (ASF), which led to a pork shortage and sustained pork prices above last year's level, as well as greater profitability of the aquaculture business in Thailand following adjustments in marketing strategies and business model.
Prasit Boondoungprasert, chief executive of the SET-listed flagship of agribusiness and food conglomerate CP Group, said in the aftermath of the ASF outbreak pork supplies dropped dramatically, particularly in Vietnam and China, significantly pushing pork prices above levels seen last year.
The pig farming industry came under structural changes, as strict farm management in line with biosafety standards is a prerequisite with a vaccine not yet available.
Moreover, farms need piglets strong enough to withstand the disease and poorly managed farms may cause another round of outbreak.
Consequently, it will take some time before pork supplies return to the normal level.
Thailand's aquaculture business enjoyed greater profitability, thanks to the new business model and strategies that focus more on domestic demand. A bright future is anticipated for the aquaculture business both in Thailand and abroad.
Mr Prasit said CPF expected earnings growth to be sustained next year, thanks to business and capacity expansion in several countries. While pork prices may soften from this year's level, they will remain high.
Meanwhile, CPF will start realising profits from the swine business in China, which is under acquisition following the approval of minor shareholders who convened in late August.
CPF is convinced its 2021 earnings will remain satisfactory, he said.