November 15, 2013

Despite the effects of a disease affecting the crustacean and by higher shrimp prices, Charoen Pokphand Foods' (CPF) shrimp business reflected an increase in net profit and in sales in the third quarter of 2013 compared to the same period last year.

"The effect of EMS [early mortality syndrome] on Thailand's shrimp industry and CPF's shrimp business was more severe than expected. Moreover, the recovery of the shrimp industry has been hampered by higher shrimp prices due to less supply in the market, which affected the cost of shrimp processing. It is estimated that shrimp supply will decline about 50% this year," stated CPF's chief executive officer Adirek Sripatak.

Nevertheless, the company showed a 10% increase in net profit on-year to THB2.65 billion (US$83.7 million) over the third quarter 2012, pushing nine-month earnings to THB5.3 billion (US$167.3 million), compared to THB18,852 million (US$585.8 million) in the same period last year.

This quarterly profit is better than Bualuang Securities expected, since the entity had forecast lower results as a consequence of weaker shrimp and overseas operations (specifically Turkey, Russia, Malaysia, the Philippines and Vietnam).

Sales rose 8% to THB105.3 billion (US$3.3 billion) in the third quarter, pushing nine-month sales revenue to THB285.89 billion (US$9.0 billion) compared to THB378.99 billion (US$11.9 billion) in the same period last year.

Since its researchers had been engaged in studying farming techniques in order to bring the shrimp survival rate back to normal, the firm is positive as to improvements in the shrimp business expected for next year.

The local vannamei farmers, who at the beginning of this year had been affected by an EMS outbreak that caused a drop in their crustacean production, have been shared with the results of this research. Now they are returning to their usual farming activities.

However, the slower shrimp business led Asia Plus Securities to predict lower net profits for CPF's 2013-14 but the decrease in feed-mill raw material cost has relieved.

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