August 10, 2007

 

CPF sees 10 percent growth in 2007 sales on expected good second half performance

 

 

Thai conglomerate Charoen Pokphand Foods Plc (CPF) is confident of ten percent sales growth this year on anticipated improved second-half performance.

 

Adirek Sripatak, the company's president and CEO said they are banking on business expansion abroad as well as seeking investments in potential countries. He cited the operations of Laos which will start next year and its Russian headquarters where business is expected to start also early next year. 

 

He said CPF plans to invest two billion baht (US$64.20 million) in overseas projects this year and source more raw materials abroad to benefit from the baht's rise against the US dollar.

 

The fund is part of a four billion baht (US$128.41 million) budget the company plans to earmark this year, including investment in new feed mills, poultry farms and processing plants. According to Adirek, the baht's strength has slightly affected the company's overall performance by 30 percent of its transactions are in other currencies such as euros and pounds, besides US dollars. The company has also imported machinery for its overseas business expansion which reduces the cost. CPF reported improved second-quarter performance with total sales of 34.749 billion baht, a rise from 31.88 billion in the same period last year.

 

The company exports branded products to Hong Kong, Singapore, Japan, Europe, the United States and other markets.

 

Higher domestic meat prices and better returns from overseas operations such as Turkey, Malaysia, India and China have contributed to the increase. Broiler exports also rose 20 percent from the same period last year. For the first six months, the company reported total sales of 63.82 billion baht, a rise of 7.58 percent from 2006. For the second quarter, CPF reported a net profit of 954.2 million baht (0.13 baht a share), a decline of 1.1 percent from 1.02 billion (0.14 baht a share) in the same period last year. For the first half the company had a net loss of 180.27 million baht, compared with a profit of 1.57 billion a year earlier.

 

CPF posted a first-quarter loss of 1.135 billion baht due to lower domestic meat prices, foreign-exchange losses and higher raw material costs.

 

CPF said it has approved the omission of an interim dividend for the first half because of the consolidated losses for the period.

 

CPF shares closed yesterday on the SET at 5.10 baht, up 12 satang, in trade worth 107.14 million baht.

 

US$1 = 31.150 Thai baht (as of August 10, 2007)