Bullish on PH market, CNPF sets P1.1-B capex

The country’s largest canned food company, Century Pacific Food Inc. (CNPF), sees 2016 shaping up to be another strong year, with some P1.1 billion earmarked for capital outlays to continue its growth trajectory.

In 2015, CNPF grew its net profit by 21 percent to P1.93 billion on the back of a double-digit growth in its branded food businesses.

Consolidated revenue was up by 14 percent year-on-year to P23.32 billion, fueled by an 18-percent rise in the branded business that offset the flat performance of non-branded tuna exports. This was in line with the company’s goal of growing its topline by 10 to 15 percent yearly or double the pace of the country’s economic growth.

“So far, 2016 has been showing similar trends with good macroeconomic tailwinds and, possibly, election-related spending benefiting us during the first three months of the year,” Century Pacific chief finance officer Oscar Pobre said in a statement.

The P1.1-billion capital spending budget this year will mostly go to plant and capacity expansion in anticipation of increased sales volumes across various segments.

CNPF’s brands include Century Tuna, Argentina Corned Beef, 555 Sardines, Swift, Angel and Birch Tree, which have established market-leading positions in the Philippines and are growing their presence overseas.

The P1.93-billion net profit last year accounted for 98.5 percent of market consensus forecast.

For 2015, Pobre said: “Robust volume growth across our three branded segments—marine-meat and milk—continues to reflect rising Filipino purchasing power, greater demand for our products and increased recognition of our brands.”

Locally, the company said sales outside of Metro Manila outperformed as the company’s distribution infrastructure improved and modern retailers pursued aggressive expansion plans. Growth in the convenience store channel was particularly strong in light of new rollouts.

Gross profit margin in 2015 remained stable at 26.6 percent as the company unlocked gains from the decline in raw material prices and invested in product improvements to spur consumption. Operating margins continued to improve as growth in operating expenses were contained. This, alongside a reduction in financing costs, increased the company’s net income margins to 8.3 percent from 7.8 percent in the previous year.

The balance sheet remained healthy in the aftermath of the company’s acquisition of Century Pacific Agricultural Ventures Inc (CPAVI), an integrated producer of high-value organic-certified and conventional coconut products whose revenue and net income will contribute to CNPF’s beginning 2016.

Last year also marked CNPF’s first foray into can-making and cold storage. Its new tin can factory is already running at full capacity and the construction of its cold storage facilities is on track for completion in the second quarter of 2016. Both capital investments are meant to manage and reduce input costs as the company braces for further growth.