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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pokphand(HK)Reg | LSE:PKPH | London | Ordinary Share | BMG715071004 | US$0.05(HONG KONG REGD) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5899J
Pokphand (C.P.) Co Ltd
03 April 2003
C.P. POKPHAND CO. LTD.
(Incorporated in Bermuda with limited liability)
ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31ST DECEMBER, 2002
RESULTS
2002 2001
Notes US$'000 US$'000
Turnover (a) 1,542,196 1,449,463
Cost of sales (1,363,107 ) (1,269,807 )
----------------- -----------------
Gross profit 179,089 179,656
Selling and distribution costs (56,335 ) (52,075 )
General and administrative expenses (92,496 ) (97,965 )
Other income, net (b) 102,294 27,698
----------------- -----------------
Profit from operating activities (c) 132,552 57,314
Finance costs (37,103 ) (59,220 )
Share of profits less losses of jointly controlled 19,048 13,396
entities
Share of profits less losses of associates 1,204 (2,233 )
----------------- -----------------
Profit before tax 115,701 9,257
Tax (d) (15,105 ) (10,640 )
----------------- -----------------
Profit/(Loss) after tax 100,596 (1,383 )
Minority interests (7,994 ) (8,915 )
----------------- -----------------
Net profit/(loss) from ordinary activities attributable to 92,602 (10,298 )
shareholders
Accumulated losses at beginning of year (140,483 ) (126,516 )
----------------- -----------------
Accumulated losses (47,881 ) (136,814 )
Transfers to statutory reserves (1,769 ) (3,669 )
----------------- -----------------
Accumulated losses at end of year (49,650 ) (140,483 )
========== ==========
2002 2001
US cents US cent
Earnings/(Loss) per share:
Basic (e) 4.290 (0.477 )
Dividend per share:
Interim: Nil (2001: Nil) - -
Final: Nil (2001: Nil) - -
Notes:
(a) Segmental information
Turnover represents rental income, dividend income and the net invoiced value of
sales after allowances for goods returned and trade discounts, and after the
elimination of intra-group transactions.
An analysis of turnover by activity and geographical location is as follows:
Turnover:
2002 2001
US$'000 US$'000
By activity:
Feedmill and poultry operations 1,542,090 1,447,481
Property holding 106 254
Investment holding - 1,728
----------------- -----------------
1,542,196 1,449,463
========== ==========
By geographical location:
People's Republic of China ("PRC"):
Hong Kong 106 281
Mainland 1,415,510 1,346,546
----------------- -----------------
1,415,616 1,346,827
Turkey 126,580 100,935
Thailand - 1,701
----------------- -----------------
1,542,196 1,449,463
========== ==========
The above analysis does not include the turnover of the Group's jointly
controlled entities and associates.
(b) Other income/(loss), net:
2002 2001
US$'000 US$'000
Amortisation of deferred restructuring expenses (1,862 ) (1,862 )
Gain on disposal of interests in associates 87,556 26,437
Gain on disposal of interests in jointly controlled entities 1,918 -
Gain on disposal of short term investments 579 3,879
Unrealised gain/(loss) of short term investments 21,358 (1,978 )
Revaluation deficit on land and building (153 ) -
Revaluation deficit on investment properties (258 ) (353 )
Impairment loss in respect of fixed assets (8,320 ) (3,777 )
Impairment loss in respect of investments in jointly controlled (901 ) -
entities
Impairment loss in respect of long term investment - (1,249 )
Impairment loss in respect of goodwill (1,652 ) (1,451 )
Interest income 3,016 8,052
Tax refund in respect of re-investment of distributed earnings from 1,013 -
the PRC Ventures
----------------- -----------------
102,294 27,698
========== ==========
(c) The Group's profit from operating activities was arrived at after charging a
depreciation of US$69.0 million (2001: US$58.9 million) and amortisation of
US$2.1 million (2001: US$2.3 million).
(d) Tax:
2002 2001
US$'000 US$'000
The Company and subsidiaries:
Provision for profits tax in respect of the year:
PRC:
Hong Kong - -
Mainland 6,870 5,544
Overseas 2,684 462
Deferred tax credit (81 ) (639 )
----------------- -----------------
9,473 5,367
----------------- -----------------
Underprovision in the prior year:
PRC:
Hong Kong - -
Mainland 345 313
----------------- -----------------
345 313
----------------- -----------------
Jointly controlled entities:
PRC:
Hong Kong - -
Mainland 4,983 3,993
----------------- -----------------
4,983 3,993
----------------- -----------------
Associates:
PRC:
Hong Kong - -
Mainland 304 967
----------------- -----------------
304 967
----------------- -----------------
Tax charge for the year 15,105 10,640
========== ==========
Hong Kong tax is calculated by applying the current rate of tax of 16% (2001:
16%) to the estimated assessable profits which were earned in or derived from
Hong Kong during the year.
In accordance with the relevant tax rules and regulations in the PRC, certain of
the Company's PRC subsidiaries, jointly controlled entities and associates enjoy
income tax exemptions and reductions. Certain subsidiaries, jointly controlled
entities and associates are subject to income taxes at tax rates ranging from
7.5% to 33%.
The overseas tax represents corporation tax payable in Turkey in respect of
income earned during the year. The corporation tax in Turkey is calculated at
the applicable tax rate of 30% (2001: 30%). An additional 10% of the total tax
charge is levied to support a state fund, which results in an effective
corporate tax rate of 33% (2001: 33%).
(e) The basic earnings/(loss) per share is calculated based on the net profit
attributable to shareholders of US$92,602,000 (2001: net loss attributable to
shareholders of US$10,298,000) and 2,158,480,786 shares (2001: 2,158,480,786
shares) of the Company in issue during the year.
Diluted earnings/(loss) per share amounts for the years ended 31st December,
2002 and 2001 have not been disclosed as no diluting events existed during the
two years.
Financial review
The breakdown of net profit/(loss) attributable to shareholders by activity and
geographical location are as follows:
2002 2001
US$'000 US$'000
By activity:
Feedmill and poultry operations 106,215 4,883
Industrial operations 4,369 3,232
Property holding (3,429 ) (660 )
Investment holding* (14,553 ) (17,753 )
----------------- -----------------
92,602 (10,298 )
========== ==========
By geographical location:
PRC:
Hong Kong (17,982 ) (18,413 )
Mainland 100,694 7,694
----------------- -----------------
82,712 (10,719 )
Turkey 8,019 (3,901 )
Indonesia 1,292 (1,978 )
Thailand 579 6,300
----------------- -----------------
92,602 (10,298 )
========== ==========
* including Hong Kong headquarters' general expenses
DIVIDEND
The Directors do not recommend a final dividend for the year ended 31st
December, 2002 (2001: nil).
MODIFIED AUDITORS' OPINION
The Auditors' report on the Group's financial statements for the year ended 31st
December, 2002 contains a modified Auditors' opinion.
The financial statements have been prepared on a going concern basis, the
validity of which depends upon the Group's ability to generate sufficient cash
inflow from its operating activities and the successful outcome of the disposal
of non-core assets. The financial statements do not include any adjustments that
would result from the failure of the Group to generate sufficient cash inflow
from its operating activities or the disposal of non-core assets not being able
to be conducted as planned. The Auditors consider that appropriate disclosures
and estimates have been made in the financial statements and their opinion is
not qualified in this respect.
BUSINESS REVIEW
The Group registered a significant rebound in operating results for the year
ended 31st December, 2002. This was mainly attributable to the gain on disposals
of interest in an associate. Consolidated turnover was US$1,542.2 million (2001:
US$1,449.5 million). Consolidated operating profit was US$132.6 million (2001:
US$57.3 million). Profit after tax for the year was US$100.6 million (2001: Loss
after tax of US$1.4 million). Net profit attributable to shareholders was
US$92.6 million (2001: Net loss of US$10.3 million).
PRC
Agri-business
During the year under review, Chia Tai (China) Agro-Industrial Ltd. ("China
Agro") and Chia Tai (China) Investment Ltd. ("China Investment"), our two
wholly-owned subsidiaries which run our agri-business operations in the People's
Republic of China ("PRC"), saw a 5.1% increase in turnover.
Turnover on a consolidated basis was US$1,415.5 million (2001: US$1,346.5
million). Together with turnover of the jointly controlled entities and
associates, turnover under management was US$2,207.3 million (2001: US$2,543.6
million). Unit sales of our two main products, complete feed and day-old chicks,
were 4.9 million tonnes (2001: 5.5 million tonnes) and 364.0 million units
(2001: 436.4 million units), decreases of 10.9% and 16.6% respectively.
The total consolidated profit attributable to shareholders of China Agro and
China Investment during the year was US$96.3 million (2001: US$4.5 million).
During the year under review, the Group disposed of 187,396,528 (2001:
40,326,024) shares in Shanghai Dajiang (Group) Stock Co., Ltd. ("Shanghai
Dajiang") at an average price of US$0.57 (2001: US$0.73) per share and recorded
a gain of US$87.6 million (2001: US$26.1 million). In addition, there was an
unrealized gain of US$20.1 million (2001: nil) from Shanghai Dajiang shares. As
at 31st December, 2002, the Group's interest in Shanghai Dajiang shares was 8.7%
(2001: 36.4%).
Excluding the gain in Shanghai Dajiang shares, our operating loss was US$11.4
million (2001: US$21.6 million).
Our operating results have been affected by a number of factors. During the
second half of 2002, outbreak of the epidemic disease of swine in some areas and
Northern PRC, abnormal rainfall, drought and the drastic increase in cost of
major raw materials caused a reduction in the gross margin and contribution of
our feed business.
For the poultry business, as the European Community has not yet released their
import control over Chinese chicken meat products, Japan remains the primary
export market for our chicken meat products. However, the devaluation of the
Brazilian currency in 2002 has led to a large inflow of low-priced Brazilian
chicken meat products into the Japanese market, resulting in a reduction of the
average selling price by 20%. Our integration ventures suffered from both losses
in quantity and gross margin for the exports.
Other than to continue focusing on value-added poultry meat processing products
for export, the Group will explore the potential markets in Europe as well as
the high value-added and branded meat processing products in the domestic
market. We will also increase our attention to develop in the domestic aqua feed
market.
Industrial business
For the year under review, the motorcycle business of Ek Chor China Motorcycle
Co. Ltd., our 68.2%-owned New York-listed subsidiary, recorded net income of
RMB53.0 million (US$6.4 million) (2001: US$4.6 million), an increase of 39.1%
over 2001. Basic earnings per share was RMB3.02 (US$0.37) (2001: US$0.26). Net
profit attributable to shareholders of this division was US$4.4 million (2001:
US$3.2 million). All the major ventures were profitable.
The PRC market shall remain full of challenges and changes. Major international
players are also seeking opportunities in the market. We shall continue to watch
carefully the market development and to further focus on consolidating and
increasing market share and improving operating efficiency.
Turkey
The performance of our Turkish operation has significantly improved and achieved
a profit of US$8.0 million (2001: loss of US$3.9 million). During the year, our
Turkish operation recorded an increase in sales of chicken meat both in terms of
volume and unit price. Moreover, it has benefited from the relatively stable
value of Turkish Lira this year when compared with the exchange loss from free
float of Turkish Lira last year. As there is a tendency in tightening the
control in environmental protection in Western Europe, part of the chicken meat
production has recently been shifted to Eastern Europe and the Middle East, our
Turkish operation is expected to benefit from this in the near future.
Indonesia
The Company maintains a 19.75% interest in P.T. Surya Hidup Satwa and a 7.09%
interest in P.T. Central Proteinaprima.
Thailand
During the year, all the warrants of Charoen Pokphand Foods Public Company
Limited held by the Group were disposed and there was a gain of US$0.6 million
on disposal.
MANAGEMENT DISCUSSION AND ANALYSIS
LIQUIDITY AND FINANCIAL RESOURCES
As at 31st December, 2002, the Group had total assets of US$1,109.1 million, up
2.6% from US$1,081.5 million at the year end of 2001. Total debt and debt to
equity ratio (debt to equity ratio is calculated by dividing the total debt by
the net asset value) were US$659.9 million and 283% respectively, as compared to
US$752.4 million and 508% as at 31st December, 2001.
Most of the borrowings were in U.S. dollars and RMB, and the interest rates
ranged from 2.12% to 7.92% per annum for 2002.
The Group had not engaged in any derivative for hedging against both the
interest and exchange rate.
CAPITAL STRUCTURE
The Group finances its working capital requirements through a combination of
funds generated from operations, short term and long term loans, floating rate
notes and from the disposal of certain assets. The Group had cash and cash
equivalents of US$95.6 million as at 31st December, 2002 (2001: US$88.6
million), an increase of US$7.0 million.
CHARGES ON GROUP ASSETS
As at 31st December, 2002, out of the total borrowings of US$659.9 million
(2001: US$752.4 million) obtained by the Group, only US$123.5 million (2001:
US$120.3 million) were secured and accounted for 18.7% (2001: 16.0%) of the
total. Certain of the Group's fixed assets located in the PRC with net book
value of US$195.4 million (2001: US$132.6 million), fixed deposits of US$1.7
million (2001: US$3.2 million) and inventories of US$3.0 million (2001: nil)
have been pledged as security for various short and long term bank loans.
CONTINGENT LIABILITIES
As at 31st December, 2002, the guarantees provided by the Group was US$27.2
million (2001: US$33.2 million).
EMPLOYEE AND REMUNERATION POLICIES
As at 31st December, 2002, the Group employed around 54,000 staff (including
20,000 staff from the jointly controlled entities and associates) in the PRC,
Hong Kong and Turkey. The Group remunerates its employees based on their
performance, experience and prevailing market rate while performance bonuses are
granted on a discretionary basis. Other employee benefits include insurance and
medical cover, subsidized training programme as well as share option scheme.
OUTLOOK
Challenging business conditions still prevail in early 2003. However, with our
continuous efforts in improving operating efficiency, upgrading technical
knowhow and focusing on product development, we believe that the Group will be
well positioned to cope with the challenges ahead and capitalize on the economic
growth in the PRC. The Board and the management remain optimistic about the
prospect of the Group.
RE-DESIGNATION OF DIRECTORS
Mr. Dhanin Chearavanont's position on the Board of the Company has been
re-designated as Chairman and Chief Executive Officer, and Mr. Sumet Jiaravanon
as Executive Chairman, both with effect from 2nd April, 2003.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
There was no purchase, sale or redemption of the Company's listed securities by
the Company or any of its subsidiaries during the year under review.
CODE OF BEST PRACTICE
In the opinion of the Directors, the Company complied with the Code of Best
Practice as set out in Appendix 14 of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")
during the year.
PUBLICATION OF FURTHER INFORMATION
All the information required by paragraphs 45(1) to 45(3) of Appendix 16 of the
Listing Rules will be published on The Stock Exchange of Hong Kong Limited's
website in due course.
By Order of the Board
Dhanin Chearavanont
Chairman and Chief Executive Officer
Hong Kong, 2nd April, 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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