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CPF Looks Forward to Ever Better Results

by 5m Editor
21 January 2009, at 11:38am

THAILAND - Charoen Pokphand Foods Plc (CPF) expects to export 95,000 tonnes of cooked poultry products this year, 10 per cent more than in 2008. The company's 2008 financial results, due to be released soon, are likely to show both sales and net profit significantly higher than in the previous year.

Although CPF plans to ship 10 per cent more cooked poultry products this year, the values are likely to fall by 10 per cent because of a lower selling price in line with eased oil prices and lower raw material costs, reports Bangkok Post.

But export values are forecast to drop by 10 per cent from an estimated 20 billion baht (THB) last year because of lower selling price in line with eased oil prices and lower raw material costs.

Shrinking global consumption due to the economic recession, notably in the European Union, CPF's key market, is also expected to affect the company's export prospects.

The chicken business currently represents 30 per cent of sales for the SET-listed flagship of the Charoen Pokphand Group.

Given the global slowdown and weakening consumption, CEO Adirek Sripratak said recently that CPF projected flat growth in its total sales revenues in 2009.

CPF's sales were estimated at THB 150 billion last year, a 15 per cent increase over 2007. Net profit is estimated at THB 3.2 to 3.5 billion, compared with 1.27 billion in 2007. It will report its results in the next few weeks.

However, in terms of profitability, the company expects a better bottom line given an ongoing cost-saving programme, lower production costs and easing oil prices.

According to Teerasak Urunanon, executive vice-president of food processing and integration operations, CPF expected sales in the EU to drop by 5 to 8 per cent this year because of lower demand.

The EU currently accounts for 55 per cent of CPF's chicken sales, followed by Japan at 35 per cent and other markets in Asia and the Middle East.

However, shipments to Japan are expected to increase by 10 per cent this year, helped by stronger yen and food safety concerns about products from markets such as China.

Mr Teerasak said that as part of the effort to offset a sales drop in Europe, the company was also seeking new markets such as Africa.

Yukol Limlaemthong, director-general of the Livestock Development Department, said Thailand's poultry exports were expected to record flat growth this year to 400,000 tonnes worth about THB 48 billion.

One reason for the poorer performance is high inventories among purchasers.

CPF shares closed yesterday on the Stock Exchange of Thailand at 3.26 baht, down four satang, in trade worth 34.92 million baht, concludes the Bangkok Post report.