June 5, 2009
Thailand's CPF expects strong revenue in 2Q
With sales of animal feed rising along with Charoen Pokphand Foods (CPF) meat exports, strong revenue and earnings growth momentum will continue through its second quarter in 2009 and onwards.
The second quarter normally marks the start of the high season for farming activity with higher production of food for export, particularly shrimp, thus wider margins are expected.
CPF's gross margin in second quarter to fourth quarter 2009 can hold up at least 15 percent although raw material costs have risen, particularly for fishmeal.
Overall prices are still about 15 percent below last year's peak. CPF locked in prices with suppliers at 15-percent to 20-percent below market prices for six to nine months, which should be enough of a cushion for its gross margin this year.
Earnings for 2009 has been revised up by 24 percent from previous target to a net profit of THB4.7 billion based on a revised gross margin assumption of 14.6 percent, previously at 14.1 percent.
Sales revenue forecasts are unchanged based on the latest TISCO's in-house exchange rate assumption.
US$1 = THB34.140 (June 5)
