November 6, 2009
CPF seen to post record profit earnings in 2010; seeks listing
Charoen Pokphand Foods (CPF), Thailand''s biggest animal feed and food producer, expects to beat this year''s record earnings in 2010 as it sells more ready-made meals and expands in India, Russia and Turkey.
This year''s profit will also exceed the consensus estimates of analysts, chief executive officer Adirek Sripratak said.
According to estimates, net income this year may almost triple to THB8.97 billion from THB3.13 billion in 2008, according to estimates.
CPF shares have gained almost threefold this year as profits climbed on higher chicken and pork prices and lower costs. Adirek said the company will spend THB5 billion annually on expansions, as it sells more meals including chicken nuggets and enlarge farms overseas.
Adirek said the company is seeking to raise US$150 million by listing a 29-percent owned affiliate, CP Vietnam Livestock, on the Vietnam stock exchange in the first quarter of next year. A dual listing for the affiliate in Singapore is also been studied, he said.
He said gross profit margins will be in the range of 15 percent to 18 percent, up from 8 percent to 13 percent previously as the company focused on processed food.
From 2007, the company increased the production of processed meat and ready-to-eat foods after earnings nearly halved in 2004, due mainly to a bird flu outbreak. The epidemic threatened raw meat sales as Japan, European countries and other nations banned imports of chicken.
Adirek said sales contribution from the farm business will drop to one-third in the next five years, down from 60 percent a few years ago, adding that the animal feed business, which has stable sales and margins, will account for the rest.
The food producer is seeking to increase exports by between 5 percent and 10 percent next year from an estimated shipment value of THB22 billion to THB24 billion in 2009. Sales from overseas operations will contribute to 25 percent of the total in the next five years, from 17 percent.