CPF is the country's largest agro-industrial and food conglomerate.
Kim Eng Securities said its recent research showed CPF's revenue was being driven by higher meat prices, including for pork and chicken, which increased 41 per cent and 25 per cent, respectively. As well, the retail price for eggs has risen 26 per cent. Thus, meat and egg products are expected to generate a good second-quarter profit for CPF, even though the cost of raw materials for animal feed remained high.
In last year's second quarter, CPF recorded losses in both its pork and egg businesses, due to lower prices.
In addition, the broker said cooked-chicken exports would likely show a strong second-quarter performance on increased demand in Japan, because China, a chicken exporter, was facing food-safety problems.
Thus, the price of exported cooked chickens was raised to US$5,000 to $6,000 (Bt168,000 to Bt201,000) per tonne in the second quarter, from $3,000 to $4,000.
Although local consumption has slowed, due to high inflation, Kim Eng expects CPF's third-quarter operating results to increase from expansion in each business except pork and eggs, for which prices are expected to decrease.
Kim Eng estimates a normalised second-quarter net profit for CPF of Bt792 million, up 27 per cent year on year and 223 per cent quarter on quarter. The gross profit margin will also show a recovery, from 12.1 per cent in the first quarter to 13.4 per cent in the second quarter.
The broker predicts CPF will pay a dividend of 8 satang a share for first-half operating results.
United Securities said the terrestrial-animal business, which contributes 28 per cent of CPF's revenue, recovered in the second quarter, thanks to higher meat prices. The second quarter is also the high season for the aquatic-animal business, in which CPF has increased its production capacity.
The broker expects second-quarter sales of Bt39.31 billion for CPF, up 13.1 per cent year on year, for a normalised profit of Bt877 million, up 27 per cent year on year.
United Securities also predicts CPF will pay a dividend of 9 satang a share for first-half operating results
The Nation, July 18, 2008