Screengrab from www.centurypacific.com.ph
The country’s leading canned food producer Century Pacific Food Inc. (CNPF) saw an 8-percent year-on-year growth in first semester net profit to P1.47 billion on the back of a double-digit growth of its branded food business and a strong recovery in exports.
CNPF generated total consolidated revenues of P16.05 billion for the first half, up by 23 percent from the same period last year, the company said in a press statement.
The branded food business registered a 13-percent increase in revenues to P11.5 billion, while export of white-labelled products to offshore original equipment manufacturers (OEMs) grew by more than 60 percent to P4.5 billion.
“The favorable topline performance was driven both by increases in sales volume and higher average selling prices across all business units. Locally, consumption has remained resilient amidst more muted growth rates compared to the election period last year. We are however happy to see that growth has picked up sequentially and that our second quarter revenues have increased relative to the first,” CNPF chief finance officer Oscar Pobre said.
The company is behind local household brands like Century Tuna, Argentina, 555, Angel and Birch Tree.
For the second quarter alone, CNPF posted P6.01 billion in revenues from the branded food business, representing a 16 percent growth versus last year and 9 percent increase versus the first quarter of 2017. The OEM business in the second quarter also posted year-on-year growth of 81 percent and sequential growth of 31 percent.
In terms of profitability, CNPF saw consolidated gross profit and operating income increase by 9 percent and 7 percent year-on-year, respectively, translating to a gross profit margin of 27 percent and an operating margin of 13 percent for the first six months ending June.
These compare to gross profit and operating margins of 30 percent, and 14 percent during the same period last year, with profitability ratios coming down due to higher input costs and the faster growth of lower margin OEM businesses.
“We faced a relatively tough first half in terms of elevated raw material prices. These are likely to persist for the balance of 2017 and margins will continue to be under pressure in the second half. However, we are still aiming to achieve earnings growth for the year with net income supported by continued top line growth, controls on our expenses, and various operating efficiencies,” said Pobre.
“Moreover, our longer-term focus remains on strengthening our brands, growing our categories, and delivering value to both our consumers and other stakeholders,” he added.
CNPF also continued to pursue various inorganic growth opportunities with the acquisition last May of the Philippine license for Hunt’s. This followed the company’s acquisition of the license to the Kamayan trademark for North America and various distribution companies in China late last year.