SINGAPORE (Apr 30): Japfa saw its earnings for the first quarter ended Mar 2018 surge eightfold to US$16.7 million ($22.1 million) from US$2.1 million a year ago due to higher revenue and profitability.

Revenue grew 15% to US$845.5 million from US$736.1 million previously, which Japfa attributes to PT Japfa Tbk’s margin and volume expansion.

This was further boosted by a narrowing of losses by Animal Protein Other (APO), which generated positive EBITDA over the quarter after navigating a challenging year throughout 2017, says the group.

The group also started recognising 100% contribution from its dairy segment, with effect from Jan 1, following its acquisition of remaining interest in its dairy business.

In all, operating profit doubled to US$73.9 million from US$36.5 million on the back of higher sales volumes and increased margins across feed, day-old chicks (DOC) and broiler -- particularly due to PT Japfa Tbk which saw its operating profit nearly triple on strong growth in poultry feed margin on lower raw material costs, as well as higher ASPs for DOC and broilers.

Looking ahead, Japfa says it intends to remain focused on meeting the rising protein consumption in the five emerging Asian markets.

“We will continue to hone our industrialised farming approach, and cement our position as one of the lowest cost producers in Asia. This strategy has worked well as it enables the Group to navigate industry cyclicality more effectively,” says Tan Yong Nang, CEO of the group.

“On Vietnam’s swine market, while we wait out for the demand and supply to achieve a new balance, we will continue to reduce our cost structure and ramp up efficiency. The group will also stay focused in implementing our strategy to increase the competitiveness of Consumer Food amidst the challenging landscape,” he adds.

Shares in Japfa closed flat at 48 cents on Monday.