Japfa net profit declined by 34.6% in 2021

The total net profit recorded was $161.2m.

Japfa posted a net profit attributable to owners of $161.2m ($US118.8m) in 2021, down by 34.6% from $246.7m ($US181.8m) in 2020, due to lockdowns that caused a significant drop in poultry demand with broiler prices falling below cost in third quarter of 2021.

Despite this result, the agricultural food firm said its revenue went up by 19.9% to $6.292b (US$4.636b) last year from $5.249b (US$3.868b) in 2020, driven by higher sales volumes across all segments, it said. 

This also helped mitigate the decline in profit margins due to tightened feed raw materials costs across their integrated operations. The firm recorded a profit margin of 7.2% from 2021 which is 2.7 points lower than 9.8% in 2020.

Japfa said its one-off extraordinary net gain of $190.2m (US$140.2m) from the sale of 80% in Dairy Southeast Asia in 2020 was excluded and presented under 2020 without extraordinary items to compare with the 2021 results.

Subsidiary PT Japfa Tbk’s revenue went up by 23.8% from $3.429b (US$2.527b) in 2020 to $4.245b (US$3.128b) in 2021, whilst operating profit also increased by 25.3% from $2.360m (US$173.9m) in 2020 to $2.957m (US$217.9m) in 2021 even if there were lockdowns that affected poultry demand in the third quarter of 2021.

Japfa noted that the closure of food stalls, malls and restaurants resulted in the significant poultry demand with broiler prices falling below cost in the third quarter last year. In late 2021, prices recovered as lockdowns eased.

Meanwhile, the Animal Protein Other’s revenue also soared by 18% year-over-year to $1.271b (US$936.6m) because of increases in sales volumes but its profits were affected by strict COVID-19 lockdowns and African swine fever in Vietnam, high cost of raw materials, as well as disruptions in Myanmar. 

The Dairy segment rendered strong revenue and profitability brought about by higher sales volumes and raw milk prices in China. Its revenue increased by 3.1% year-over-year to $765.9m (US$564.3m) in 2021 from $7.430m (US$547.5m) in 2020, with the additional contribution from Farm 8 in Chifeng, Inner Mongolia and two new farms in Shandong.

$1 = US$0.74