THAILAND: Century Pacific Food Inc. (CNPF) aims to sustain a double-digit growth in earnings this year despite a more challenging environment brought about by rising input costs and weakening local currency.
“The moderate year-on-year net profit growth of 10 per cent in the first quarter sets the tone for the balance of the year,” CNPF president and chief executive officer Christopher Po said.
Last year, the downturn in the commodity cycle lowered input costs and thus improved CNPF’s margins. Lower tuna prices last year, for instance, allowed the firm to beef up low-cost inventory and increase factory utilization.
However, in Po’s view, this year CNPF’s net profit would be “a bit under pressure” compared to last year due to rising input costs.
Despite the challenges, the firm was still on track of its goal of growing revenues by two times the rate of the country’s gross domestic product (GDP). In the first quarter, the country’s GDP grew by 6.4 per cent year-on-year.
“The peso weakened, commodity prices are higher (so) there’s a bit more uncertainty right now. But we are still optimistic about business prospects. We do expect—and it’s happening now —there’s margin pressure,” Po said.
He also said the export business still offered enough room for growth. Although export business during the first three quarters of 2016 was slow, he stressed there was a spike in original equipment manufacturer (OEM) tuna business toward the end of the year.
As a result of the uptick, the company was still planning to sell its tuna products to the major brands in the United States, Europe and Japan.
CNPF purchased the Kamayan shrimp paste trademark for North America in 2016, marking the firm’s maiden venture into branded categories outside its core segments.