Vannamei white leg shrimp. (Photo: StockFile)
Shrimp disease outbreak puts dent on Charoen Pokphand's net profit
Thursday, January 24, 2013, 03:20 (GMT + 9)
The outbreak of early mortality syndrome (EMS), also known as acute hepatopancreatic necrosis syndrome (AHPNS), affecting vannamei farms is more devastating than previously thought, and is expected to cause a drop in this crustacean production. This will have a negative effect on the prawn business of Charoen Pokphand Food (CPF) in Thailand, industry analysts estimate.
The shrimp accounts for 12 per cent of total revenues of the company (6 per cent generated for shrimp feeds, 4 per cent for shrimp farming, and 2 per cent for processed and cooked foods), according to Asia Plus Securities.
Despite some encouraging progress, Bualuang Securities highlighted that there was a slowdown in the fourth quarter, because between 15 per cent and 20 per cent of shrimp farms were affected by the outbreak.
Therefore, CPF is feeling the impact of a decline in the production of white shrimp.
Meanwhile, Thai entrepreneurs have come together to exchange ideas and find a solution to this outbreak. As a first step, they have decided to completely stop the production of shrimp for two months, while the farms are disinfected.
The company told its shareholders that the outbreak situation should ease in the second quarter of 2013.
According to a report by Asia Plus Securities, the total net benefits of CPF for fiscal 2012 would stand at THB 19,100 million, which would account for an increase of 20.4 per cent yoy, standing 3.2 per cent below its current forecast.
It is foreseen that only two units abroad, those of China and Vietnam, will report quarterly earnings, which are anticipated to be very discreet.
- Shrimp farm crops suffer from EMS outbreaks
By Natalia Real