Charoen Pokphand Foods (CPF), Thailand's largest agro-industrial and food conglomerate, saw its net profit soar 71% in the first quarter of this year thanks to improving gross margins and lower raw material prices, The Bangkok Post reports
The company on Wednesday reported a net profit of 770.5 million baht (€16.4m) in the three months to March 31, up from 451.24 million (€9.6m) n the year before.
President and CEO Adirek Sripratak attributed the rise in profit to successful production and financial management and to a national and global improvement in the aquaculture business, back to normal after a one-year slowdown.
CPF reported first-quarter sales worth 34.77 billion baht (€746.7m) , up from 33.86 billion (€727.1m) last year, despite reduced sales for business units such as livestock feed and livestock breeding due to lower output.
"The global financial crisis that started last year has had little impact on CPF's export revenues as Thailand has received more orders from Japan as a result of the food safety issue in China last year," said Adirek.
"Also, CPF's ready-to-eat products such as shrimp wonton, which we started to export last year, have been well accepted in many countries, especially in the United States."
The company is bullish about its performance over the rest of the year - and especially for its production and financial management and its food exports, particularly in the ready-to-eat segment, he said.
In a related development, the company's board yesterday gave a green light for the increase of its investment in Charoen Pokphand (India) Private Ltd (CPI) from 71.2% of paid-up shares to 100%.
Although the slowdown has cut consumption, CPF still stands to benefit from declining raw material prices.
CPF's performance in the second quarter should further improve due to the high export season, lower raw material costs and the company's improving chicken business in Turkey, expected to break even in April, analysts said.