[BANGKOK] Charoen Pokphand Foods Thailand's largest meat and feed producer, has halved its annual revenue and sales growth target to 5 per cent due to Thailand's slowing economy, its chief executive told Reuters on Friday.
Record household debts in Thailand have left consumers with little appetite to spend, and weak external demand for Thai exports have hurt the trade-dependent economy. The finance ministry in July cut its growth forecast for the third time this year, and sees southeast Asia's second-largest economy growing 3.0 per cent in 2015. "We normally set out an annual target growth of 10 per cent. But this year we cut it back because of the impact of the slowing domestic economy on consumption," CEO Adirek Sripratak told Reuters by telephone.
CP Foods, controlled by billionaire Dhanin Chearavanont, said this week it would spend up to 10 billion baht (US$279 billion) buying back its shares.
The company has also earmarked capital expenditure of 20 billion baht (US$558 million) for the year, but the share repurchase would have no impact on capital spending, Mr Adirek said. "The company's board has approved the share repurchase plan because we have surplus cash flow and we want to shore up our share prices in the market," he said.
CP Foods, which said in July it was buying a Russian poultry business for US$680 million in cash, said on Wednesday it planned to buy back 400 million shares, equivalent to 5.17 per cent of total paid-up capital.
The shares will be repurchased between Sept 10 and March 9, 2016.
The repurchase announcement ended a five-day slide in the stock, which rose for a third successive day on Friday to close at 19.3 baht, taking its gains since Aug 26 to 10.3 per cent.
Before the announcement, the shares had fallen to a five-year low of 17.5 baht.