Corporate News

Century Pacific Food sets P1-B capex for 2016

Posted on April 08, 2016

CENTURY PACIFIC Food, Inc. (CNPF) is allocating more than a billion pesos for capital expenditures (capex) this year, mainly to support capacity expansion, after earnings went up by more than a fifth on the strength of its branded business, growing sales in the provinces and improved margins.

The country’s largest canned food company saw its net profit climb by 21% -- topping its goal of expanding by 10%-15% annually -- to P1.93 billion last year from P1.59 billion in 2014, CNPF said in a disclosure to the stock exchange on Thursday.

Consolidated revenues rose 14% year on year to P23.32 billion from P20.44 billion, as the 18% growth in the branded business made up for the flat performance of the non-branded tuna export.

“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,” CNPF Chief Finance Officer Oscar A. Pobre was quoted in the disclosure as saying.

This year, CNPF set a capex budget of P1.1 billion, bulk of which will fund plant and capacity expansion in anticipation of rising sales volumes across various segments.

Likewise, sales outside of Metro Manila “outperformed” on the back of its improved distribution infrastructure and as modern retailers such as convenience stores pursued aggressive expansion in provincial areas.

“So far, 2016 has been showing similar trends with good macroeconomic tailwinds, and possibly election-related spending, benefitting us during the first three months of the year,” Mr. Pobre said.

Gross profit margins were stable at 26.6% last year, as gains from the decline in raw material prices were invested in product improvements to boost consumption. Net income margin improved to 8.3% from 7.8% due to lower financing costs and contained operating expenses.

The company said its balance sheet remained healthy with minimal interest-bearing debt incurred as a result of the acquisition of Century Pacific Agricultural Ventures, Inc., an integrated producer of high value organic-certified and conventional coconut products. It will start contributing to CNPF’s revenues and earnings this year.

Century Pacific produces brands like Century Tuna and 555 canned sardines; Argentina, Swift and Wow canned meat; as well as Angel and Birch Tree canned milk. Shares in CNPF added six centavos or 0.32% to close at P18.62 each on Thursday. -- Krista Angela M. Montealegre