Japfa Q1 earnings fall 64% to US$17.3m as costs surge

AGRI-FOOD company Japfa posted earnings of US$17.3 million for the first quarter ended March, down 64.3 per cent from earnings of US$48.5 million in the year-ago period.

The decline comes despite a 13 per cent increase in revenue to US$1.25 billion in Q1 on the back of higher sales volumes across all segments.

The company's chief executive officer Tan Yong Nang said: “Global high raw material prices, ongoing supply-chain issues and inflation are weighing on costs, while the Covid-19 pandemic is still impacting consumer demand in some of our markets, resulting in pressures on our profitability.”

Gross profit fell 28 per cent to US$200.4 million, as cost of sales outpaced the rise in revenue. Cost of sales climbed 27 per cent to US$1.05 billion during the quarter.

Operating profit slumped 45.7 per cent to US$81.4 million, with operating profit margin taking a 7.1 percentage point drop to 6.5 per cent.

Earnings per share fell to 0.85 US cents in the latest quarter, from 2.4 cents a year ago.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

“By being one of the most efficient and lowest-cost producers, Japfa is able to ride through major down-cycles,” Tan said. “As we have already demonstrated in the past, we can handle market challenges and cyclicality.”

Shares of Japfa closed S$0.005 or 0.8 per cent lower at S$0.615 on Thursday (Apr 28), before the announcement.