Japfa 3Q18 net profit surges nearly 5 times on better poultry, swine performance

Vietnam currencyVietnamese currency

Agri-food player Japfa reported on Tuesday that its third-quarter net profit surged nearly five times on-year to US$14.3 million, from US$3.0 million in the year-ago period, amid higher average selling prices (ASP) for Indonesian poultry and Vietnam swine.

Revenue increased 7.8 percent on-year in the quarter ended 30 September to US$877.4 million, it said in a filing to SGX after the market close on Tuesday.

The animal protein Indonesia segment, or PT Japfa Tbk, posted a 14.2 percent revenue increase in Indonesian rupiah terms, although it was up only 4.2 percent in U.S. dollar terms, it said.

The operating margin rose 2.3 percentage points to 10.6 percent on higher ASPs for poultry amid a lack of day-old-chick (DOC) supply in Indonesia, which also helped boost breeding operations’ profit, it said.

Profit after tax for the segment rose 39.0 percent on-year in the quarter to US$39 million, despite US$11.2 million of foreign-exchange losses and the rupiah weakened against the U.S. dollar, it said.

The animal protein other (APO) segment, which is the animal protein operations in Vietnam, Myanmar, India and China, reported revenue rose 29.4 percent in the quarter to US$153.8 million, while it swung to an operating profit of US$11.7 million from a year-ago loss of US$6.4 million, it said.

“The improved performance was mainly driven by record operating profit from its Vietnam operations with continued strong recovery of swine prices and higher ASP for DOC,” Japfa said. “This also reflects a re-balancing of Vietnam’s domestic swine market demand-supply
levels following China’s swine import restrictions imposed in November 2016.”

Dairy segment revenue rose 20.5 percent on-year to US$101.9 million and operating profit rose to US$15.3 million for the quarter on higher milk yields and volumes, Japfa said.

But the dairy segment posted a loss after tax of US$400,000 in the third quarter, mainly on a bio-asset fair value loss of US$14.1 million, narrower than the US$16.3 million fair value loss in the year-ago quarter, it said. It attributed the fair value loss to a lower population of heifers and calves at the end of the third quarter compared with the second quarter.

The consumer food segment’s revenue fell 7.1 percent on-year in the quarter to US$53.8 million, although it was up 2.9 percent in rupiah terms, it said. The segment posted an operating loss of US$5.6 million on lower ASP, inability to pass on increased chicken raw material costs to consumers amid intense competition and continued promotional spending to maintain market share, it said.


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