Aug. 8--Charoen Pokphand Foods (CPF) is aiming for a net profit of about 8 billion baht this year after generating a record net profit in the second quarter.

"We are upbeat about maintaining the profitability momentum in the third and fourth quarters that we achieved in the first and second quarters," said president and CEO Adirek Sripratak.

"The prospects for food and ready-to-eat products under the CP brand is promising, our overseas businesses are growing, and raw material costs are much lower than a year earlier."

But the company now expects sales to grow this year by about 5 percent, down from an estimate of 10 percent, as the downturn has hurt consumer demand, he said.

CPF yesterday reported its second-quarter net profit had more than tripled, pushed up by growth in overseas business, better results for its aquaculture business in Thailand due to lower material costs, and increased sales of ready-to-eat products under the CP brand to markets worldwide.

The company earned a net profit of 3.194 billion baht, a year-on-year surge of 224 percent from 984.78 million and up from 770.5 million in the first quarter.

The result beat an average forecast of 2.6 billion baht from brokerage analysts.

Sales for the quarter increased nearly 4 percent to 40.6 billion baht while production costs fell 3.4 percent to 32.7 billion.The company's six-month net profit rose to nearly 4 billion baht on sales of 75.4 billion baht.

"Strong operating results reflect the company's strategy to move toward the food business and expanding overseas operations in high-potential countries together with improving production efficiency in Thailand operations," said Mr Adirek.

Currently, CPF's business is divided into three main lines -- feed, farm and food businesses.

CPF aims to increase its revenue proportion from its food business from 20 percent of total sales revenue to at least 30 percent in the next five years, which would help stabilise CPF's net profit, he said.

The company's overseas operations performed very well over the first half of the year in all countries, including India, Malaysia and Turkey, he said.

CPF has plants and operations in eight countries and is acquiring feed companies and chicken processing businesses that will make Taiwan the ninth. The company expects to realise equity gains from an affiliate in Taiwan from the third quarter onwards.

For the first six months of 2009, overseas operations contributed 17 percent of CPF's total sales revenue, with exports providing 15 percent and the local market 68 percent.

"For the remaining months, what we are concerned about most is political instability," said Mr Adirek. "Political conflict might not have a direct impact on our business but would deliver a negative effect on foreign investment and confidence, particularly for tourists, which would hurt the overall economy."

CPF has agreed an interim dividend for the first six months of 0.23 baht per share, up 188 percent from a year earlier.

CPF shares rose yesterday by 10 satang to 5.55 baht, in trade worth 509.18 million baht.

-----

To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com.

Copyright (c) 2009, Bangkok Post, Thailand

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

CPF,

A service of YellowBrix, Inc.