The following article appeared in seafood.com and Undercurrent News:
In a preview discussion with Thai stock analysts, Charoen Pokphand Foods said that although it is still suffering losses from early mortality syndrome (EMS), they expect the situation to normalize in the second half of the year.
The company — whose share prices has just a 12-month low on problems with bird flue, EMS — disclosed to Asia Plus Securities that it had found the cause of the shrimp disease and found a prevention method, so the problem is expected to ease in the end of the second quarter.
Asia Plus expects that CPF will continue to suffer a loss of more than Bt800 million in the first quarter of 2013, improving from a massive loss of Bt2 billion in the fourth quarter of 2012.
The pressure factor is the shrimp-farming and shrimp-food business (accounting for 12 per cent of CPF’s total income). This is projected to decline continuously in this quarter because early mortality syndrome (EMS) in white shrimps has made white-shrimp products from CPF farms and other entrepreneurs in Thailand plunge as much as 30 per cent from the same period of last year.
However, the company disclosed that the problem is expected to ease in the end of the second quarter. Net profit will normalize in the second half of 2013, with support from a decrease in the cost of raw materials.
CPF’s first quarter margins were affected more by low sales of shrimp feed than poor sales of shrimp. As part of the industry’s collaboration, Thai shrimp farmers stopped seeding ponds for 1-2 months to let them recover from EMS, then restart the whole process from the hatchery. In May, it will be apparent if the new crop still has EMS.
Sources: The Nation, Asia Plus Securities, Thai News Service