SINGAPORE (Mar 1): Japfa reported a 81% drop in FY17 earnings to US$22.6 million ($29.9 million) from US$118.8 million in FY16.
Revenue was 5% higher at US$3.19 billion, 5% higher than US$3.03 billion recorded in the previous year, due to sales volume increases in the group’s operations in the Animal Protein Indonesia, Dairy and Consumer Food segments. This was offset by the decrease in the revenue in the Animal Protein Other segment because of the low swine price environment in Vietnam.
The market downturn, arising from China’s swine import restrictions which started in 4Q16, had curtailed overall market demand in Vietnam causing swine average selling prices (ASP) to slide to levels well below cost throughout FY17.
Cost of sales was 10% higher at US$2.62 billion from US$2.37 billion last year.
This brings FY17 gross profit to US$574.2 million, 14% lower than US$665.4 million a year ago.
Marketing and distribution costs increased by 14% to US$137.3 million compared to US$120.7 million in the previous year.
Finance costs increased by 12% to US$67.3 million from US$60.0 million last year.
During FY17, the group recorded foreign exchange adjustment gains of US$5.14 million, compared to a loss of US$8.28 million.
The group has proposed a final dividend of 0.5 cents per share.
Tan Yong Nang, CEO of Japfa says, “In all the markets that we operate in, we strive to be one of the lowest cost industrialised producers as this places us in a stronger position to navigate industry headwinds and benefit from industry consolidation opportunities. We will push for continued growth through higher sales volumes and operational efficiency.”
Shares in Japfa closed at 47 cents on Thursday.
