Japfa has reported earnings of US$17.3 million ($23.9 million) for the 1QFY2022 ended March, 64% lower than earnings of US$48.5 million in the same period the year before.

Earnings per share (EPS) for the period fell to 0.85 US cents from 2.40 US cents in the same period the year before.

Group revenue, however, grew 13% y-o-y to US$1.25 billion driven by higher sales volume across all segments.

Gross profit, on the other hand, fell 28% y-o-y to US$200.4 million due the high global raw material prices, inflationary pressures, the African swine fever (ASF) and Covid-19.

EBITDA fell 30.1% y-o-y to US$129.8 million.

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Operating profit fell 45.7% y-o-y to US$149.8 million, while operating profit margin (OPM) fell 7.1 percentage points to 13.6%.

Core PATMI without foreign exchange (forex) fell 64% y-o-y to US$24.6 million.

Segmentally, revenue for PT Japfa Tbk grew 12.3% y-o-y to US$846.0 million due to higher sales volumes across the board. The segment’s profits took a beating, however, due to the raw high raw material and global shipping costs. Profitability was also affected by the recent Covid-19 outbreak.

With the higher feed selling prices, PT Japfa Tbk is generally able to pass on the costs of raw materials, although poultry feed margins were subdued since the 2QFY2021 due to the high raw material prices.

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The animal protein other (APO) segment saw an 11.4% y-o-y growth in revenue to US$245.3 million. Profits were also impacted due to higher cost of raw materials. The ASF and Covid-19 also impacted the segment’s profitability.

The dairy segment also saw higher revenue on the back of higher sales volumes. Revenue during the quarter increased by 18.2% y-o-y to US$152.4 million. Again, profits were affected by expenses due to the proposed listing in Australia.

Japfa CEO Tan Yong Nang says, “Despite the negative impact of major external factors, we recorded respectable results in this first quarter. Global high raw material prices, ongoing supply chain issues and inflation are weighting on costs, while the Covid-19 pandemic is still impacting consumer demand in some of our markets, resulting in pressures on our profitability.”

“Our response to this challenging environment has been tangible so far, as demonstrated by a 13% growth in revenue. By being one of the most efficient and lowest cost producers, Japfa is able to ride through major down-cycles and, as we have already demonstrated in the past, we can handle market challenges and cyclicality. With a focus on providing safe and affordable proteins to increase food security in Emerging Asia, we remain well positioned take advantage of the growth opportunities in the region,” he adds.

Shares in Japfa closed 0.5 cent lower or 0.81% down at 61.5 cents on April 28.

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