CNPF net income improves 6%

Century Pacific Food, Inc. (CNPF) reported that its net income inched up 6 percent to P4.22 billion in the first nine months of 2022 from P3.98 billion in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said its consolidate revenues for the first nine months of the year amounted to P47.36 billion, increasing by 14 percent from P41.33 billion in the same period last year.

“The performance was primarily driven by the Company’s Branded business, which comprised the majority of its sales,” CNPF said.

Composed of Marine, Meat, Milk, and other emerging businesses, the Branded segment outperformed—clocking in a growth of 17 percent year-on-year for the nine-month period, demonstrating resilience in consumer demand.

The OEM Tuna and Coconut exports business, hindered by high shipping costs earlier in the year, has recovered, registering a growth of 5 percent in the first nine months of 2022 on top of last year’s high base driven by improving freight rates, easing supply chain pressures, and favorable movements in commodity prices.

“Volatile operating conditions and uncertainty set the scene in 2022, but these were cushioned by the Philippine economic reopening and a receding pandemic. As such, the economy continues to rebound, but Filipino families are still prioritizing their spending,” said CNP Chief Financial Officer Richard Manapat.

He added that, “As a food company that endeavors to deliver affordable nutrition, we have a wide array of brands that cuts across multiple price tiers – from value for money to mass market, all the way up to affordable premium. In this way, we’re able to provide food options that cater to varying consumer needs.”

In terms of profitability, CNPF was able to sustain its year-to-date gross margins at 24.5 percent, posting a 10 basis point increase from the comparable period last year despite elevated input prices. The increase was largely due to the favorable impact of an outperforming Branded business.

On a sequential basis, the Company continued to see a softening in gross margins driven by the increase in prices of key raw materials and packaging quarter-on-quarter.

Year-to-date operating expenses as a percentage of sales landed at 14.1 percent, expanding by 90 basis points versus the same period last year, driven by the continued support for recently launched innovations and demand-generating activities, investments in brand-building and the organization, and higher logistics cost.

The increase was partially offset by cost optimization programs undertaken by the Company.

“On the whole, we are grateful for the results delivered by the team amidst these extraordinary times – a clear demonstration of the resilience of the Filipino. Nonetheless, we are keeping a close watch on the operating environment. As we adjourn 2022, we look towards posting decent growth and returns by year end,” said Manapat.

He added that, “2023 is on the horizon, and plans are underway. We continue to see higher costs working their way into the system. While conditions remain uncertain at this point, we have full confidence in our brands, our team, and business model to remain resilient.”