CPF aims for Baht 8 billion profit in 2009
Charoen Pokphand Foods (CPF) is aiming for a net profit of about 8 billion baht this year after generating a record net profit in the second quarter.
"We are upbeat about maintaining the profitability momentum in the third and fourth quarters that we achieved in the first and second quarters," said president and CEO Adirek Sripratak.
"The prospects for food and ready-to-eat products under the CP brand is promising, our overseas businesses are growing, and raw material costs are much lower than a year earlier." But the company now expects sales to grow this year by about 5%, down from an estimate of 10%, as the downturn has hurt consumer demand, he said.
Profit more than tripled
CPF has reported that its second-quarter net profit has more than tripled, pushed up by growth in overseas business, better results for its aquaculture business in Thailand due to lower material costs, and increased sales of ready-to-eat products under the CP brand to markets worldwide, earning a net profit of 3.194 billion baht, a year-on-year surge of 224% from 984.78 million and up from 770.5 million in the first quarter.
Sales for the quarter increased nearly 4% to 40.6 billion baht while production costs fell 3.4% to 32.7 billion. The company's six-month net profit rose to nearly 4 billion baht on sales of 75.4 billion baht.
"Strong operating results reflect the company's strategy to move toward the food business and expanding overseas operations in high-potential countries together with improving production efficiency in Thailand operations," said Adirek.
Three main business lines
Currently, CPF's business is divided into three main lines - feed, farm and food businesses. CPF aims to increase its revenue proportion from its food business from 20% of total sales revenue to at least 30% in the next five years, which would help stabilise CPF's net profit, he said.
"The company's overseas operations performed very well over the first half of the year in all countries, including India, Malaysia and Turkey, he said. For the first six months of 2009, overseas operations contributed 17% of CPF's total sales revenue, with exports providing 15% and the local market 68%.
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