Century Pacific sees 40% profit growth

LEADING canned food producer Century Pacific Food Inc. (CNPF) is seen to grow its net profit this year by 30 to 40 percent, boosted by the consolidation into its books of a sister company engaged in integrated coconut production.

This year, consensus forecast is for CNPF to post P2.5 billion in net profit, 31.5 percent up from last year’s net profit of P1.9 billion.

CNPF’s goal is to grow at double the pace of the country’s gross domestic product (GDP), which translates to 10-15 percent based on a GDP growth range of 5-7 percent.  But the consolidation of General Santos-based Century Pacific Agricultural Ventures Inc. (CPAVI)—which produces high value organic- certified and conventional coconut products for both export and domestic markets—into its operations boosted the company’s earnings this year, CNPF president Christopher Po said in an interview after the company’s stockholders meeting.

In the first quarter, CNPF grew its revenue by 20 percent while net profit rose by 45 percent to P640 million. “Looking at the balance of the year, I think that trajectory will continue,” Po said.

As such, Po noted that the 30-40 percent bottom line growth range was likely, taking into account the extraordinary impact of the CPAVI consolidation.

CPAVI’s acquisition price was set at a discount to third party valuations and earnings were immediately accretive this year, Po said.  As such, he said the consolidation of CPAVI was contributing to the double-digit top-line and bottom-line growth for CNPF.

This year, CNPF has earmarked P1.1 billion for capital spending – mostly to boost the capacity of its tuna, meat and coconut processing plants.  The budget is around double the usual annual capital outlays of the company, Po said.  As such, he said the increase in budget was a “vote of confidence” on domestic consumers.

The expansion program will account for three to five years worth of growth for CNPF’s tuna and meat businesses.

This month, CNPF switched a P330-million cold storage facility.  Payback is expected in 5.5 years.

The group has ventured into renewable energy by installing solar panels on the rooftop of the cold storage facility, which will offset 20 percent of the energy requirements of this plant.