June 04, 2014

CNPF reports 1Q14 earnings of P320m

Century Pacific Foods (CNPF, Not Rated) disclosed to the Exchange that this came on the back of 1Q14 revenues of P4.5b. Comparable pro-forma 2013 figures were not provided. However, management stated that sales corresponded to 21% of its full-year target.

Branded products contributed 80% of total volume sales while private label exports accounted for the remainder. Gross margin grew to 25% from the full-year 2013 rate of 17% on higher selling prices and lower materials cost. Net margin improved from full-year 2013's 4% to 7% as well.

Our take: The company typically makes 60% of full-year sales in the second half of the year. With 21% of the target already met in 1Q14, CNPF appears on track to meeting its full year-goal of P21.43b.

Assuming that it can maintain its 7% net margin, this translates to a net income target of P1.5b. We further note that there is room for margins to improve starting October 2014 when CNPF commissions its new cannery that could lower packaging costs.– WealthSec