Agri-food company Japfa saw its earnings more than double to US$322.0 million ($428.7 million) for the FY2020 ended December due to stronger performance of Swine-Vietnam and Dairy-China.

Core PATMI without forex increased 63.3% y-o-y to US$195.4 million driven by a strong performance from operations. The figure does not include an extraordinary net gain of US$140.2 million from the sale of Dairy-SEA.

Earnings per share (EPS) for the period came in at 15.86 US cents, from 6.45 US cents in FY2019.

Conversely, group revenue fell 1% y-o-y to US$3.87 billion due to lower revenue in animal protein at PT Japfa Tbk. This was offset by higher revenue across the group’s Animal Protein – Other (APO), Dairy, and Others segments.

Segmentally, PT Japfa Tbk saw revenue decrease 8% y-o-y to US$2.53 billion due to lower demand for poultry following Covid-19 related disruptions in Indonesia.

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APO’s revenue increased 15% y-o-y to US$796 million primarily due to its operations in Vietnam, arising from the benefits of Japfa’s long-term strategy in industrialised farming.

Dairy revenue was up 16.1% y-o-y to US$547.5 million driven by strong milk yields and higher raw milk prices.

Gross profit for the FY2020 stood 5% y-o-y higher at US$857.6 million due to the 2% y-o-y lower cost of sales of US$3.01 billion.

FY2020 operating profit grew 7% y-o-y to US$363.8 million due to improved operating profit in APO due to the high swine fattening average selling prices (ASPs) due to shortage in pork supply following the African Swine Fever (ASF) in Vietnam.

Operating profit in Dairy saw improved operating profit driven by higher raw milk price in China, also due to shortage in supply.

Operating profit in PT Japfa Tbk dropped on the back of low broiler and DOC average selling price as a result of lower consumer spending due to Covid-19 related disruptions in Indonesia.

Gain from changes in fair value of biological assets for the Group was US$7.1 million in FY2020 as compared to US$2.1 million in FY 2019. Changes in fair value of biological assets in FY2020 mainly comprises of a US$18.0 million gain from the sale of beef in China and a US$10.8 million loss from the changes in fair value of dairy herd in China.

As at Dec 31, 2020, cash and cash equivalents, statement of cash flows and ending balance stood at US$221.9 million.

An interim special dividend of 10 cents per share, as well as a final ordinary dividend of 1 cent per share has been declared.

SEE: Japfa reports six-fold surge in 1H20 earnings to US$76.8 mil despite decline in revenue

Looking ahead, Japfa says it remains confident in its long-term outlook despite the uncertain macro-economic sentiments, as they have “set a solid base for future growth”.

“In this unprecedented year marked by the Covid-19 pandemic, we delivered significant growth in profits, making the most of the strong momentum of our two key pillars Dairy-China and Swine-Vietnam. This robust performance demonstrates that our diversification strategy across proteins and countries is a true strength in cushioning cyclicality and market’s challenges,” says CEO Tan Yong Nang.

“Our FY2020 performance is also proof of our disciplined execution and resilient business model. Additionally, the two major transactions in the Dairy segment demonstrate our ability to build scalable market leading businesses. As a result of the successful divestment of Dairy-SEA, we are pleased to recommend a special interim dividend of 10 Singapore cents per share,” Tan adds.

Shares in Japfa closed 1.5 cents lower or 1.6% down at 90 cents on Feb 26.