CPF's Q1 spike 43%, amid expectations of mild impacts from COVID-19 & better annualized results
Charoen Pokphand Foods Public Company Limited (CPF) reported Bt6,111 million in net profits in the first quarter of 2020, a 43% increase from the same period last year, due chiefly to the African Swine Fever ( ASF) that caused a significant shortage in pork supplies and a spike in pork prices in many countries particularly Vietnam.
CPF, a leading agro-industrial and food conglomerate that operates in 17 countries and exports products to more than 30 countries under the "Kitchen of the World" vision, reaped Bt138,135 million in sale revenue in the first quarter, up by 10% from the corresponding period last year. The sale revenue of its overseas businesses in 16 countries which contributed 68% of total revenue increased by 12% on year, while the operations in Thailand which constituted 32% of total revenue witnessed a 6% revenue growth rate.
Mr. Prasit Boondoungprasert, chief executive officer of CPF, said that the increase in net profit was contributable to the pork business in many countries particularly Vietnam. The ASF outbreak last year led to a significant decline in pork supplies in Vietnam, which pushed up the average pork prices in Vietnam and Cambodia. Meanwhile, businesses in many destinations achieved expansion targets while CPF started to realize revenue from Hylife Co., Ltd, a pork business operator in Canada, in the first quarter.
Mr. Prasit said that the COVID-19 pandemic led to the economic slowdown and lower purchasing power, but CPF's businesses witnessed only a mild impact as its products are essential for everyday life. CPF has upheld its mission in delivering quality and safe products while ensuring no stoppage in production and work process which may cause food shortages. Maximum safety measures have been exercised to cope with the outbreak while employees are assured of the best care. CPF also initiated a social program by supplying food to 200 public hospitals under the Public Health Ministry, 20,000 medical personnel' families and 20,000 overseas returnees. CPF recently issued more than 1 million discount coupons to medical care volunteers to ease their cost of living, while delivering 25 batches of food to slums in the Greater Bangkok and provinces in cooperation with the Agriculture Ministry.
CPF has applied risk-diversification strategies, banking on the variety of animals and products as well as investment destinations. Aside from the well-balanced portfolio, CPF has continually emphasized safe production process to ensure quality products for consumers and adjusted marketing channels accordingly to changing consumer behaviors. CPF's business plan has been reviewed in response to the COVID-19 outbreak, to offer better marketing channels under a New Normal. The operating results for 2020 are thus expected to exceed the 2019 level as expected.