January 24, 2013
Shrimp disease outbreak affects Charoen Pokphand's net profit
The prawn business of Charoen Pokphand Food (CPF) in Thailand will be affected by the outbreak of early mortality syndrome (EMS), also known as acute hepatopancreatic necrosis syndrome (AHPNS).
The shrimp accounts for 12% of total revenues of the company (6% generated for shrimp feeds, 4% for shrimp farming, and 2% for processed and cooked foods), according to Asia Plus Securities.
Despite some encouraging progress, Bualuang Securities highlighted that there was a slowdown in the fourth quarter, because between 15% and 20% of shrimp farms were affected by the outbreak. Therefore, CPF is feeling the impact of a decline in the production of white shrimp.
Meanwhile, Thai entrepreneurs have come together to exchange ideas and find a solution to this outbreak. As a first step, they have decided to completely stop the production of shrimp for two months, while the farms are disinfected.
The company told its shareholders that the outbreak situation should ease in the second quarter of 2013. According to a report by Asia Plus Securities, the total net benefits of CPF for fiscal 2012 would stand at THB19,100 million (US$641 million), which would account for an increase of 20.4% on-year, standing 3.2% below its current forecast. It is foreseen that only two units abroad, those of China and Vietnam, will report quarterly earnings, which are anticipated to be very discreet.
