October 14, 2008

Charoen Pokphand Foods (CPF) is expected to report a positive result in the third quarter, with profit surging 40 percent to THB 1.1 billion from the second quarter.

Sales are forecast to increase 13 percent on-year to THB 40.1 billion on the backdrop of robust exports.

Chicken exports have increased, while prices rose to US$5,000-6,000 per tonne from US$3,000-4,000 last year. Domestic meat sales are expected to be lower but will continue to perform well.

Average prices for swine, broilers and eggs rose 18 percent, 12 percent and 5 percent on-year to THB 53 per kg, THB 41 per kg and THB 2.23 per egg, respectively. Price adjustments for all feed products took full effect in mid-August, which would help the business from high feed grain prices. As compared with the second quarter, lower losses from the chicken business in Turkey is expected.

Expectations for fourth quarter
  

Fourth quarter earnings are projected to be weaker, but overall result for year 2008 is expected to have an on-year profit growth of 135 percent to THB 2.3 billion. Swine prices are lower and broiler prices have slipped to around THB 34 per kg, but grain costs have also declined, which would allow CPF to maintain profitable margins for meat.

Meanwhile, investment in Russia is expected to contribute to sales as operations begun in late third quarter.

THB 1 = US$0.0293 (October 14, 2008)