SINGAPORE (Oct 26): Agri-food producer Japfa posted a 94% decline in earnings to US$3.0 million ($4.1 million) for the 3Q ended September, from US$48.0 million a year ago.
Revenue rose 3% to US$814.3 million in 3Q17, from US$788.0 million a year ago.
However, operating profit was nearly halved to US$56.0 million in 3Q17, compared to US$105.4 million a year ago.
Animal Protein Indonesia segment recorded lower operating profit of US$47.0 million in 3Q17, falling from US$79.6 million a year ago. This was mainly due to margin shrinkage across its poultry and beef businesses, as well as the absence of a one-off US$13.0 million gain in 3Q16 from the sale of beef cattle in Australia.
Japfa’s Animal Protein Other segment, comprising its swine fattening business in Vietnam, incurred operating losses of US$6.4 million, compared to operating profit of US$11.4 million a year ago, as swine prices remained below costs in 3Q17.
Loss from changes in fair value of biological assets was US$16.2 million in 3Q17, compared to a gain of US$5.7 million a year ago, a result of lower market price of raw milk, heifers and calves.
As at end September, cash and cash equivalents stood at US$136.0 million.
“Although we have noticed a pickup in Vietnam’s swine prices quarter-on-quarter, we are still in a down cycle and it will take time for the swine market in Vietnam to recover,” says Japfa CEO Tan Yong Nang.
“A key focus is to further strengthen our operational efficiency so as to sharpen our position as one of the most competitive and efficient producers in the markets that we operate in,” Tan adds.
Shares of Japfa closed 3.5 cents higher at 62 cents on Thursday, representing an increase of 6.0%.
