CENTURY Pacific Food, Inc. (CNPF) said margin pressures seen in the home market mean its international investments will help drive profit growth to double-digit levels this year.
CNPF President Christopher T. Po said that while the main driver of growth is still the domestic tuna business, the company is starting to see growth from international investments, particularly in China. The group consolidated Century China Group of Companies into CNPF in 2016 in order to expedite decision-making for the company.
“We will leverage on the existing equity of the Century brand in China to grow the existing business and create a channel for our products into this massive market,” Mr. Po said in his message to shareholders during the company’s annual meeting in Pasig City on Friday.
The listed firm’s China business currently covers around 30 cities with about 40 employees.
“The first order of business is to stabilize the organization… since it’s under new management we’re stabilizing it. Studies are on the way to see what products we could introduce to the China market,” Mr. Po added.
CNPF also purchased the Kamayan shrimp paste trademark for North America in 2016. This marks CNPF’s maiden venture into branded categories outside its core segments. Its latest venture was the acquisition of the license of North American pork and beans brand Hunt’s from Universal Robina Corp. in May.
“(Businesses in the) US, Middle East, because of overseas Filipinos, are starting to grow,” Mr. Po said.
To date, CNPF’s export business comprises 25% of its overall operations, spanning 58 countries including the Middle East and Southeast Asian regions. This translates to P6-7 billion in annual revenue.
Asked if the group has more acquisitions in the pipeline, Mr. Po said CNPF is open to opportunities should they arise but will not be as aggressive to focus on growing current investments.
This year, the company is planning to make P1.1 to 1.5 billion in capital expenditures. Actual spending in 2016 stood at P1.2 billion.
The executive noted that while earnings would be a “little more muted” this year, the company will still be able to deliver healthy results.
“What were tailwinds in 2016 are now headwinds in 2017. Commodity prices are higher, there’s a bit more uncertainty right now, but having said that we’re still cautiously optimistic with business prospects, but we do expect that there is margin pressure,” Mr. Po said.
Earnings of the country’s largest canned food manufacturer grew by 10% during the first quarter of 2017 to P701 million, following a 17% rise in gross revenue to P7.5 billion.
“I think Q1 2017 results where our topline still grew 17%, bottomline moderated to 10%, so I guess that sets the tone for the rest of the year,” Mr. Po said. — Arra B. Francia
