Bangkok, Thailand-headquartered Charoen Pokphand Foods (CPF) has posted Bt 259,183 million in sales revenues for the first half of 2019, which is a slight gain over turnover generated during the same period last year. Earnings before interest, tax, depreciation and amortization (EBITDA) amounted to Bt 22,175 million, a 44% increase from a year ago.
The company operates integrated agro-industrial and food business, including livestock and aquaculture products ranging from swine, broilers and value-added chicken to duck, shrimp and fish. CPF is also a major supplier of animal feed, operates retail and foods outlets, and owns major assets abroad including Bellisio Foods, one of the largest frozen ready meal and prepared foods suppliers in the United States, and Westbridge Foods, a British poultry producer.
Chief Executive Officer Prasit Boonduangprasert (pictured above) reported that turnover in local currency increased by 5-6% year-on-year. However, as 67% of CPF’s total revenue was generated overseas, the contribution was affected by the appreciation of Thai baht against foreign currencies. Once converted to Thai baht, the revenue in local currency showed an increase of only 4%.
Nevertheless, thanks to the easing of pork oversupply – especially in Thailand, Vietnam and Cambodia – CPF’s profitability improved markedly. Gross profit margin rose from 11% last year to 14%, allowing EBITDA to jump by 44%.
CEO Prasit noted that the company’s first-half net profit would have improved significantly from the same period last year, but for two extraordinary items. During the period, it had to book a loss from the adjustment of biological assets fair value and realized additional expenses worth Bt 1,812 million as a result of enforcement of the 7th edition of the Labor Protection Act. Under the law, a new maximum severance rate is raised from 300 days to 400 days of a worker’s latest wage and applies to employees with 20 or more years of service. Hence, CPF’s first-half net profit was just Bt 8,384 million, down by approximately 6% from the same period in 2018.
The company’s board of directors has agreed to pay an interim dividend of Bt 0.30 per share for the first-half performance. The list of shareholders entitled to receive the dividend will be announced on August 29, after the shares go ex-dividend on August 28. The payment will be made on September 12.
