Industrial agri-food company Japfa has been buying back its shares steadily following its recent 1HFY2022 ended June earnings.
The most recent buying was on Aug 10, when the company acquired 282,200 shares at between 59 cents and 60.5 cents. This brings the total number of shares bought back under the current mandate to 2.62 million or 0.129% of its total share base.
Before this, Japfa was buying on most days between Aug 1 and Aug 8. The volume bought ranged from as low as 41,200 shares on Aug 1 to as high as 1.02 million on Aug 3. The transacted prices ranged from 58.5 cents to 61 cents.
On July 28, Japfa reported sales grew on higher selling prices but earnings dropped because costs increased by a bigger magnitude. Revenue for the six months to June hit US$2.5 billion ($3.45 billion), up 10.4% y-o-y. Earnings, however, were down 62.9% y-o-y to US$44 million.
“While uncertainties remain at a global level, we continue to focus on being one of the most efficient and lowest cost producers in our domestic markets,” says CEO Tan Yong Nang in the earnings commentary.
“This enables us to ride through major downcycles, as we have successfully demonstrated in the past, and provide safe and affordable protein foods to consumers in Asia.”
See also: UHUY HEHE 123 DBS CEO sells more shares, pockets proceeds of $13.8 million thus far this month
The company says the application for the Hong Kong listing of dairy unit AustAsia is still pending. “In addition, the timing of the proposed listing will be subject to prevailing market conditions,” says Japfa on July 28.
As part of the proposed listing, announced in March, Japfa plans to distribute in specie its entire shareholding in AustAsia to its shareholders by way of capital reduction.
Separately, the Straits Times reported on July 21 that a Japfa unit will be the second Indonesian company to ship live chickens to Singapore. This follows Malaysia’s ban on exports of live poultry that took effect on June 1, forcing Singapore to look for alternative sources. The first Indonesian company to do so is Charoen Pokphand Indonesia, a unit of the Thai conglomerate.
See also: Chairman and CEO Kuok raises stake in Wilmar International following softer 1Q
Record earnings and dividend
Somewhat similar to Japfa, Wilmar International bought back shares too right after its earnings report. On Aug 11, Wilmar bought back more than 3.1 million shares at between $4.16 and $4.2 each, This follows an earlier buyback of 405,500 shares at between $4.22 and $4.25 each on Aug 5. This brings the total number of shares it has bought back under its current mandate to nearly 36.6 million shares or 0.58% of its total share base.
On Aug 4, Wilmar reported record half-year earnings of US$1.17 billion for its 1HFY2022 ended June, up 55.1% y-o-y. The better showing can be attributed to improved performance across all key business segments as well as higher contributions from its associates and joint ventures. Revenue in the same period was up 22.3% y-o-y to US$36.1 billion, in line with higher commodity prices during the period.
The top line, according to Wilmar, was further supported by improvement in the sales volume of oilseeds and grains business segments.
Wilmar plans to pay an interim dividend of six cents per share, a record half-year payout. In 1HFY2021, it had paid out five cents per share.
Kuok Khoon Hong, Wilmar’s chairman and CEO, says that in 1HFY2022, the commodities markets were volatile because of the combination of protectionist measures, inflationary pressures and severe weather conditions, as well as geopolitical conflicts. “We are fortunate to be in the agri-processing business as the demand for food products is less impacted by slowing economies as compared to other industries,” says Kuok.
“The recent corrections in commodity prices will hopefully restore some of the demand destroyed by high prices and improve margins in the downstream business,” he adds.
For more stories about where money flows, click here for Capital Section
He notes that while palm oil prices have fallen from their peak in 2Q2022, they remain higher than in the pre-Covid period, thus mitigating the effects on oil palm plantation performance. “We believe our business model will continue to help us achieve long-term sustainable growth. Barring unforeseen circumstances, we are optimistic that performance for the rest of the year will be satisfactory.”
