Japfa Q3 net profit jumps on stronger performance across most business segments

AGRI-FOOD company Japfa posted a net profit of US$14.3 million for the third quarter ended Sept 30, up from US$3 million a year ago, on the back of stronger performance across most business segments.

Revenue went up 7.8 per cent to US$877.4 million, despite weakening currencies in major subsidiaries.

Earnings per share stood at 0.77 US cent, up from 0.17 cent a year ago.

No dividend was declared.

In Q3, the Animal Protein Indonesia segment, or PT Japfa Tbk, continued to be the largest revenue driver for the group at 65 per cent. Revenue increased 14.2 per cent in Indonesian rupiah terms, but only 4.2 per cent in US dollar terms due to the depreciation of the rupiah.

APO, which refers to the group's animal protein operations in Vietnam, Myanmar, India and China, continued its recovery in 3Q2018 - it recorded revenue of US$153.8 million, a 29.4 per cent year-on-year growth and a turnaround in operating profit to US$11.7 million compared to a loss of US$6.4 million a year ago.

The improved performance was mainly driven by record operating profit from its Vietnam operations with continued strong recovery of swine prices and higher average selling prices for day-old chick. This also reflects a rebalancing of Vietnam's domestic swine market demand and supply levels following China's swine import restrictions imposed in November 2016, said the group.

In its outlook, Japfa said that it is confident that its core competencies in large-scale farming and food production, diversified strategy across multiple proteins and geographies, together with its track record in replicating its industrialised and scalable business across the region, will sustain its growth in the mid- to long-term.