Century Pacific Food Inc. (CNPF), the maker of popular canned tuna and corned beef products, said its income grew 24 percent last year to P3.9 billion from the previous year’s P3.14 billion, as the pandemic pushed people to buy more canned goods.
Revenues grew slower at 19 percent to P48.3 billion from the previous year’s P40.5 billion, mainly due to the good performance of its branded business which saw sales increase by 25 percent from 2019 figures.
The branded business, composed primarily of the marine, meat and milk business units, remained as the major contributor to the company’s overall sales representing 81 percent of total topline. The balance of 19 percent of sales is accounted for by its commodity-linked OEM export business, which saw topline decline 1 percent year-on-year as a result of softer commodity prices, reallocation of capacity to domestic requirements and a stronger peso.
“We saw robust demand for our branded products all throughout 2020 – beginning with a strong pre-Covid-19 performance, followed by pandemic-related demand spikes, then sustained growth to wrap up the year due largely to the essentials and staples nature of our portfolio,” Christopher Po, the company’s executive chairman, said.
CNPF said it expects a double-digit topline and bottomline growth target for 2021, despite a high 2020 base and continued uncertainty due to the pandemic. The growth target is due largely to resilient demand for the company’s core branded products, recovery in its OEM export business and increased contribution from new products and emerging categories.
Starting April 1, the company is folding Pacific Meat Company Inc. (PMCI), an emerging player in the large refrigerated food category, into the publicly-listed firm.
CNPF is buying Pacific Meat for P650 million from its parent firm Century Pacific Group Inc.
The company said its acquired the Pacific Meat at a discount and the price is less than book value and significantly lower than its 2020 annual sales. Pacific Meat will be retained as a separate legal entity.
CNPF will also acquire inventory worth P275 million, and the mode of payment shall be in cash.
Pacific Meat has its own manufacturing facilities, cold chain distribution and an innovation pipeline of refrigerated better-for-you products. It is expected to provide CNPF with growth opportunities in a major segment of the food market.
“We are looking at refrigerated food as another platform for growth and look forward to bringing in PMCI as it has now hit scale and built out a pipeline of new products that will supplement CNPF’s. It will provide capabilities in a completely different food segment which is growing and will have synergies with the shelf-stable part of our portfolio,” Po said.
“Moreover, as a result of this acquisition, all consumer good businesses of the Po family will consolidate into the listed CNPF, eliminating potential sources of conflict of interest and improve our overall corporate governance. We believe the terms of the deal are minority shareholder friendly and we’ve undergone a robust process to ensure the transaction is at arm’s-length.”