Japfa UD2 has reported a loss of US$35.9 million ($48.2 million) for the 2HFY2022 ended Dec 31, 2022, down from the earnings of $321,000 in the same period the year before.
This brings the group’s FY2022 earnings to US$8.2 million, 93% lower y-o-y.
The results were impacted by a “global challenging environment” where high raw material costs and limited increases in average selling prices (ASPs) impacted margins. Costs of agricultural commodities increased to record levels in 2022 while the increases in ASPs were constrained by lower consumer purchasing power.
In addition, the group’s animal protein other (APO) business in Vietnam was also affected by the African swine fever (ASF).
Loss per share for the 2HFY2022 stood at 1.75 US cents while earnings per share (EPS) for the FY2022 0.40 US cents
Revenue for the FY2022 increased by 7% y-o-y to US$4.36 billion as the PT Japfa Tbk and APO segments recorded revenue increases.
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Gross profit fell by 12% y-o-y to US$557.5 million as cost of sales grew by 10% y-o-y to US$3.81 billion.
As at Dec 31, 2022, cash and cash equivalents stood at US$280.4 million.
“Our FY2022 results reflect a global challenging environment, with inflationary pressures on production costs and other external headwinds, such as ASF in Vietnam. The macro-economic uncertainties of the past year emphasise the importance of having a proven business model, ability to execute and financial discipline, which are the backbone of Japfa,” says Tan Yong Nang, CEO of Japfa.
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“In the near term, we expect the global economic conditions to remain volatile, but we remain optimistic about our long-term growth opportunities based on our position of strength in staple proteins and the growth prospects for protein consumption in our key markets,” he adds.
A final dividend of 1.0 cent per share has been proposed, down from the total final dividend of 1.5 cents in the year before.
Going forward, the group expects raw materials to remain high on the back of weather conditions affecting crop production in some countries. The ongoing situation in Ukraine as well as the hikes in interest rates will also increase costs for raw materials.
“In the near-term, we expect these global external factors to remain uncertain, but we are cautiously optimistic over the solid prospects for staple protein consumption in our markets. In addition, the recent reopening of China is expected to improve prospects in the region, which could drive demand in our markets,” says the group.
As at 9.11am, shares in Japfa are trading 1 cent lower or 3.33% down at 29 cents.
