SINGAPORE (July 31): Agri-food company Japfa saw its earnings plunge 83% to US$5.0 million ($6.8 million) for the 2Q19 ended June, from US$29.6 million a year ago.
Earnings per share (EPS) tumbled to 0.27 cents in 2Q19, compared to 1.63 cents in 2Q18.
2Q19 revenue rose 8% to US$975.0 million, from US$901.0 million in 2Q18.
The increase was led by higher revenue from Animal Protein Indonesia – the group’s largest segment – which grew 8.9% to US670.2 million.
However, operating profit fell US$30.9 million to US$77.2 million in 2Q19, driven by the Animal Protein Indonesia segment on the back of low broiler average selling price as a consequence of supply and demand imbalance.
In addition, the Animal Protein Other segment reported an operating loss of US$0.1 million during the quarter, compared to an operating profit of US$10.1 million a year ago. This was mainly due to a lower swine fattening average selling price in Vietnam.
Marketing and distribution costs rose 7% to US$38.9 million during the quarter, while administrative expenses climbed 5% to US$75.9 million.
The group also incurred a US$10.1 million loss during the quarter from changes in fair value of biological assets, compared to a gain of US$2.7 million a year ago.
As at end June, cash and cash equivalents stood at US$131.0 million.
“The agri-food business is subject to cyclicality and other external factors that are beyond our control. This is exactly what happened in this quarter, with our profitability affected by low average selling prices in two of our core business pillars,” says Japfa CEO Tan Yong Nang.
“Despite that, our diversified business model allows us to navigate agri-business cycles and deliver a healthy EBITDA,” he adds.
Japfa reported EBITDA of US$110.5 million for 2Q19, some 21% lower than EBITDA of US$139.5 million a year ago.
Shares in Japfa closed 1 cents lower, or down 1.9%, at 51.5 cents on Tuesday.
