February 11, 2009

Thailand's Charoen Pokphand Foods (CPF) is seen to report a profit drop of 7 percent year-on-year and a 74 percent quarter-on-quarter to US$12.6 million in Q4 in 2008.

 

This softer performance will likely come from seasonal impact on shrimp and in the export business while its chicken business in Turkey is likely to remain in a loss.

 

The meat business should continue to deliver a profit on the back of favourable prices for swine, up 23 percent year-on-year to THB54 per kilogram.

 

Ongoing growth of the overseas business is also forecasted with equity gains from affiliates expected to grow by 42 percent year-on-year.

 

The normalised profit is projected at THB3.2 million for 2008, a 218 percent jump from 2007.

 

This is attributed to strong exports driven by higher demand and price increases, domestic meat prices also stood at very profitable levels.

 

Overseas business including India, Vietnam and Malaysia continues to show growth.

 

Even with the economic slowdown and weaker consumer spending, CPF is expected to maintain healthy performance with a stable profit of THB3.2 million this year.

 

Meat prices in particular, swine and broilers, are at favourable levels of THB57/kg and THB38/kg, against declining raw material prices.

 

However, feed business in Thailand is forecast to remain healthy, due to sales price adjustments to reflect increasing costs of raw materials.

 

Chicken exports are expected to be flat or grow slightly even with the lower demand from the EU.

 

Exports to Japan should benefit from food safety problems in China and overseas business will carry the growth momentum coupled with new contributions from Russian livestock operations which begun late last year.