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Public company info - C. P. Pokphand Co. Ltd. , 00043.HK
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C. P. Pokphand Co. Ltd., 00043.HK - Company Profile
Chairman Soopakij Chearavanont
Share Issued (share) 24,072,000,000
Par Currency U.S. Dollar
Par Value 0.01
Industry Agricultural, Poultry & Fishing Production
Corporate Profile Business Summary: The Group operates in China and Vietnam. The Group is a leading agri-food industry player in both countries and its businesses range from feed milling, animal farming to food production. Performance for the year: For the year ended 31 December 2020, the Group’s revenue, which excludes discontinued operations, increased 24.0% to US$4,333 million (2019: US$3,495 million). Agri-food business in China contributed 19.8% of the Group’s revenue while agri-food business in Vietnam contributed 80.2% of the Group’s revenue. Overall gross profit margin for the year was 29.6% (2019: 20.0%). The Group’s profit attributable to shareholders was US$2,155 million. Excluding the one-off gain on the deemed disposal of the Group's discontinued operations of US$1,466 million, the Group’s profit grew from US$346 million in 2019 to US$689 million in 2020. Basic and diluted earnings per share were both US 8.507 cents (2019: US 1.365 cents). Excluding the one-off gain on the deemed disposal of the Group's discontinued operations, basic and diluted earnings per share were both US 2.719 cents (2019: US 1.365 cents) The Board has proposed a final dividend per share (“DPS”) of HK$0.076. Including interim DPS of HK$0.03, total DPS in 2020 was HK$0.106 (2019: HK$0.032). Business Review Agri-food Business in China At the beginning of 2020, the outbreak of COVID-19 brought China’s economy to a halt and caused some operational delays and disruptions to the Group’s businesses. As a leading agri-food player in China, the Group strive to maintain the Group's production so as to enable a stable supply in the food production chain. Nonetheless, while the performance of the Group's feed business remained solid, those of the Group's farm and food businesses situated in hard hit areas during the initial COVID-19 outbreak were impacted as a result of logistical issues. The African swine fever situation in China started to come under control in 2020 but overall swine prices remained high. This situation motivated scaled farmers who have financial resources to increase swine production, driving demand for swine feed in the Group’s targeted feed segment – the commercial segment. On the poultry side, the outbreak of African swine fever in 2019 led to some farmers switching to poultry farming but consumer demand was hit by COVID-19 in 2020. This situation resulted in an oversupply of poultry and subsequent decline in broiler prices, benefitting the Group's poultry feed sales but hampering the Group's poultry farming business. Continuing Operations Continuing operations in China cover the Group's poultry farming and value-added processed food businesses. In 2020, revenue from continuing operations in China increased to US$856 million from US$714 million in 2019 as the Group continued to ramp up the production of the Group's food factories. Overall gross profit margin for the Group’s continuing operations decreased from 19.2% in 2019 to 4.6% in 2020, mainly affected by the operational disruptions caused by the initial outbreak of COVID-19 and the reduction in broiler prices as compared to 2019. Discontinued Operations Discontinued operations include the Group's China feed and swine food businesses for the period covering 1 January 2020 to 30 November 2020. Revenue of the Group’s discontinued operations in China, which was de-consolidated for the entire 2020, amounted to US$4,182 million (full year 2019: US$3,466 million). Profit for the period from discontinued operations attributable to shareholders was US$170 million (full year 2019: US$129 million). The Group’s China feed revenue for the first eleven months of 2020, which was de-consolidated for the entire 2020, amounted to US$3,753 million (full year 2019: US$3,159 million). Swine, poultry, aqua, other feed products and premix accounted for 50.4%, 31.8%, 7.0%, 6.7% and 4.1% of China feed revenue, respectively. China feed sales volume was 7.83 million tons (full year 2019: 6.93 million tons). Swine feed sales increased as China replenished swine inventory. Also, the switch to poultry farming due to the earlier African swine fever outbreak benefitted the Group's poultry feed sales. Revenue from the Group's swine food business for the first eleven months of 2020, which was de-consolidated for the entire 2020, amounted to US$430 million, compared to US$307 million in the full year of 2019, mainly due to the surge in swine prices compared to 2019. Share of Profit of a 35%-owned Associate – CTI CTI, as from the completion of the merger on 1 December 2020, is engaged in China feed and integrated swine businesses. The Group’s share of profits of this 35%-owned associate – as from the completion date was US$66 million in 2020 (2019: Nil). This amount represented the Group's 35% share of CTI’s profit for the month of December 2020. Agri-food Business in Vietnam In 2020, Vietnam’s economy remained relatively resilient even under pressure from the COVID-19 pandemic, natural disasters and animal diseases. While Vietnam was inevitably affected by COVID-19, the impact on the country’s local economy was less severe compared to other countries. African swine fever had been a threat to the agri-food industry in Vietnam since early 2019 and continued into 2020, with the second wave hitting the industry in the fourth quarter of 2020. The outbreak of African swine fever caused a decline in swine population. Supply shortage in the market resulted in a surge in swine prices. Generally speaking, swine prices in 2020 hovered at historical high levels. High swine prices were beneficial to the Group's swine farming business although lower swine population in Vietnam had some effect on the demand of swine feed. Overall, the Group's Vietnam agri-food business remained strong. The Group’s agri-food business in Vietnam generated revenue of US$3,477 million, representing an increase of 25.0% year-on-year. Feed business accounted for 25.8% of the Group’s Vietnam revenue, while farm and food businesses combined accounted for the remaining 74.2%. Overall gross profit margin of the Group’s agri-food business in Vietnam leaped to 35.7% in 2020 (2019: 20.2%), mainly due to increased margin from the Group's swine farming business. In 2020, total feed sales volume in Vietnam decreased 4.0% year-on-year to 1.63 million tons but feed revenue increased 1.3% year-on-year to US$898 million. Swine, poultry, aqua and other feed products accounted for 29.4%, 23.4%, 45.6% and 1.6% of this segment’s revenue, respectively. the Group's swine feed sales reduced along with lower swine population. Furthermore, the COVID-19 pandemic dampened demand for poultry, impacting the Group's poultry feed sales. On the other hand, the Group has expanded an effective shrimp feed marketing programme that successfully raised the sales of the Group's higher priced shrimp feed, more than offsetting the decline in overall feed sales. Combined revenue of the Group’s farm and food businesses in Vietnam was US$2,578 million, a 36.1% increase year-on-year. Swine farming continued to be the major revenue contributor of this segment. Favourable swine prices for the year lifted the performance of this segment. Average selling price of the Group's fattening pigs in 2020 was approximately VND76,600 per kg while the average selling price was VND46,200 per kg in 2019 – an increase of 65.8% year-on-year. Prospects: Going into 2021, despite positive developments on the vaccine front, uncertainties stemming from the COVID-19 pandemic is expected to continue. Outbreak of animal diseases would also bring uncertainties and challenges to the Group − African swine fever remains a threat and the avian flu new variant is also posing new challenges to the agri-food industry. Overall, despite the solid results of 2020, the Group remain cautious for 2021.

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