Profit Attributable to Owners Surges 14.5 Times to US$132.8 million
Strengthening Competitiveness and Seizing Opportunities for Growth
HONG KONG, March 28, 2011 /PRNewswire-Asia/ --
FINANCIAL HIGHLIGHTS
| For the year ended 31 December | ||
| US$ (million) | 2010 | 2009 |
| Turnover | 1,950.8 | 74.2 |
| Profit Attributable to Owners | 132.8 | 8.6 |
| Gross Profit | 309.8 | 9.5 |
| Gross Profit Margin (%) | 15.9 | 12.8 |
| Basic Earnings per Share (US cents) | 1.200 | 0.296 |
| Diluted Earnings per Share (US cents) | 0.777 | N/A |
| Final Dividend (HK cents) | 1.6 | 0.5 |
C.P. Pokphand Co. Ltd ("CPP" or the "Group"; HKEX: 43), the leading animal and aqua feed producer in China, has announced its annual results for the year ended 31 December 2010. During the period under review, the Group reported a profit attributable to owners of US$132.8 million (2009: US$8.6 million), representing a year-on-year increase of 14.5 times. Total turnover reached US$1,950 million, 94.3% of which was attributable to the feed business while the Chlortetracycline ("CTC") business accounted for 5.7%. Overall gross profit margin increased to 15.9%. The Board recommended a final dividend of HK$1.6 cents per share for the year (2009: HK$0.5 cent).
Since completing the acquisition of a feed business in China from the parent company in late February 2010, the Group has strengthened its competitive edge in the feed business and has achieved significant enhancements in its operational results. Feed revenue for the ten months to 31 December 2010 rose to approximately US$1,840 million on sales of 3.76 million tons of animal feed products. By product categories, complete and concentrate feed accounted for 91.7% of total turnover of all feed products while swine, poultry, aqua and other animal species contributed 38.7%,38.2%,10.9% and 3.9% respectively, while premix feed accounted for 5.6%. The Group also reached a feed mill leasing agreement with the parent company in October to further enhance production capacity.
Through committed R&D efforts, the Group developed and promoted a series of products that are grouped in Nutrition Systems to meet the changing nutritional requirements of growing animals through different stages of development. These products of greater nutritional value have improved the productivity and efficiency of animal breeders. Enhanced product value, combined with comprehensive after-sales services through technical sales associates who are specialized in various aspects of production management, and together with CPP's professional sales teams and an extensive network of exclusive distributors, also helped ensure continued sales growth. At the same time, through product review and rationalization, product structure optimization and flexible pricing, the Group successfully lifted overall gross profit.
In 2010, the Group's CTC business grew strongly as turnover rose 50.4% year-on year to US$110 million, of which domestic sales and exports accounted for 24.8% and 75.2%, while feed-grade CTC ("FG CTC") and Hydrochloride CTC ("HCL CTC") contributed 71.9% and 28.1%, respectively. Industrial business continued to grow as profit rose 11.7% year-on-year to US$14.7 million on the back of booming infrastructure investment and strong demand for automobiles.
Looking ahead, a growing demand in China and throughout the region for quality food products, coupled with increasing awareness of food safety, will continue to fuel the demand for quality and safe feed products to the benefit of the Group. CPP has signed an agreement on the leasing of four feed plants from its parent with an aim of enhancing production capacity. The Group will optimize plant production by assigning specific production lines to produce specialized high value nutrition products. Furthermore, the Group will increase investment in R&D while continuing to monitor raw material price trends through centralized procurement to strengthen and improve overall efficiency.
In addition to developing the Chinese market, the Group's management will also focus on investment opportunities overseas in order to further advance the long-term interests of its shareholders. In January 2011, CPP and its parent company entered into an Option Agreement, pursuant to which the Group was granted an option to acquire from the parent a majority stake in an integrated livestock and aquaculture company in Vietnam. The Group has taken the long-term interests of its shareholders into consideration and is in the process of evaluating this opportunity which may enable the Group to further diversify income and enhance profitability.
About C.P. Pokphand
C.P. Pokphand is the leading feed producer in China and is renowned for developing new feed formulas and providing the finest quality animal feeds to farm operators across the country. It has established a significant presence in 28 provinces and municipalities in China and has more than 26,000 exclusive agents distributing its products nationwide.
