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Companies/Food Industry
August 8, 2007

CP Foods Q2 net profit down on lower margins
Charoen Pokphand Foods, Thailand's largest chicken exporter, reported a much less than expected 6.7% fall in quarterly net profit on August 8 as profit margins dipped, Reuters reported.

CPF said in a financial statement it had a net profit of 954 million baht ($28 million) in the second quarter, compared with a net profit of 1.02 billion baht a year earlier and a net loss of 1.13 billion baht in the first quarter.

But six analysts polled by Reuters had expected on average a net profit of only 510 million baht.

Sales for the quarter rose 9% to 35 billion baht, the firm said. But gross margins for the quarter fell to 13.4% from last year's 14.9%, according to a Reuters calculation.

Its average domestic chicken price in the quarter was 32 baht per kg while costs were about 29 baht per kg, but pork was only 36 baht per kg, below its cost of 41-42 baht per kg, analysts said.

The firm has said it expected sales to grow 5-10% this year from 125 billion baht in 2006, in line with analyst forecasts, as overseas subsidiaries would help expand sales.

It had a net loss of 180 million baht for the first six months and would not pay an interim dividend, the company said.

Eleven analysts polled by Reuters Estimates forecast its 2007 net profit would rise about 9% to 2.74 billion baht. Reuters


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