February 25, 2004
CP Foods Expects Poor Outlook in First Half 2004
Thailand's top chicken producer Charoen Pokphand Foods Plc (CPF) expects gloomy outlook for the first half in 2004 following the bird flu outbreak in Asia and US shrimp dumping allegation.
CPF posted a 14% drop in net profit last year, registered earnings amounting to 2.42 billion baht on sales of 83.1 billion baht, compared with 75.14 billion baht in 2002.
CPF's chief operating officer Adirek Sripratak said the bird flu virus, which has led to a sharp drop in chicken consumption, and the investigation into dumping of frozen shrimp in the United States would affect the first-half performance of the company this year.
But he expects operations to improve in the second half.
CPF's two main export products, chicken and shrimp, are at risk due to the bird flu outbreak and anti-dumping charges from the US.
The company attributed the fall in profit last year mainly to a net loss of 826 million baht in the first quarter due to declining domestic meat prices, especially for chicken in Japan, and tight checks for banned antibiotics from the the European Union.
Attempts by a US shrimp farmers' group to seek an investigation into dumping by Thailand and five other countries also weighed on the company's fourth-quarter performance, an analyst said.
''Though its performance in the second and third improved significantly, the results were not strong enough to offset the losses in the first and fourth quarters,'' he said.
In a breakdown of the company's total revenues last year, 37% came from animal feed, 28% from domestic meat sales, 23% from meat exports and 12% from other sales.
Shares of CPF closed yesterday on the Stock Exchange of Thailand at 4.04 baht, down four satang, on trade worth 12 million baht.