July 10, 2007

 

CPF sees a profit-turning second quarter

 

 

Higher domestic meat prices and better performance from its Turkish operations has helped CPF turn round from a loss making first quarter to an expected THB 435 million (US$13.7 million) in profits for the second quarter of 2007.

 

The company, Thailand's largest food processor, lost THB 1.1 billion (US$34.76 million) last quarter.

 

Chicken prices in the country, which was at a low last quarter, have risen from THB 27/kg to THB 32/kg, above the average THB 29/kg.

 

Losses in its pork business have also been ameliorated as average prices rose from Bt34/kg to Bt37/kg. However, it is still below the average cost of THB 42/kg.

 

The pork business is likely to turn a 2H07 profit as reduced prices prompt further price increases. Meat prices are likely to stay at favourable levels for the rest of 2007 and 2008.

 

Shrimp and chicken exports are forecast to grow 10-15 percent this year. CPF would benefit from lower shrimp and chicken export duties with trade agreements with Japan, a major trading partner.

 

Meanwhile higher import quotas for chickens bound for Europe would further help the company.

 

2008 earnings estimate has been revised up by 18 percent but 2007 forecast was cut by 20 percent due to the poor performance shown in the first quarter.

 

CPF is now projected to post a normalised profit of THB 1.741 billion (US$55 million) in 2007 and grow 99 percent in 2008 to THB 3.458 billion (US$109.26).

 

(US$1=THB 31.5)