9MFY24 Financial Performance

• Revenue Growth: Japfa’s revenue increased 3.7% YoY to over US$3.4 billion, driven by higher sales volumes and lower costs across its major markets.
   
• Profitability Surge: The Group’s EBITDA rose by more than 90% to US$375.2 million, surpassing the full-year 2023 EBITDA of US$237.9 million, with operating profit increasing to US$293.0 million from US$105.6 million in 9MFY23.
   
• Core PATMI Improvement: Japfa recorded a positive Core PATMI without Forex of US$90.5 million, a significant turnaround from a negative US$17.0 million in 9MFY23, supported by steady feed margins, higher swine volumes and prices in Vietnam, and lower production cost

Consumer Brands

• Greenfields: Known for its dairy products, including milk, cheese, and yogurt. Greenfields is a well-recognized brand in Southeast Asia.
   
• So Good: A brand offering a range of processed poultry products such as nuggets, sausages, and ready-to-eat meals.
   
• So Nice: Focuses on soy-based products, including tofu and soy milk.
   
• Real Good: Provides a variety of dairy products, including flavored milk and yogurt drinks.
   
• Vaksindo: Specializes in livestock vaccines, primarily for poultry, and is a leader in the Indonesian market.

Manufacturing Capabilities:

• Feed Mills: Japfa operates large-scale feed mills that produce high-quality animal feed for poultry, swine, and aquaculture. These feed mills are a crucial part of the supply chain, ensuring consistent and nutritious feed for livestock.
   
• Breeding Farms: The company has breeding farms equipped with advanced genetics and biosecurity measures. These farms focus n breeding superior livestock, including poultry, swine, and aquaculture species, to ensure high productivity and health standards.
   
• Commercial Farms: Japfa’s commercial farms are involved in the large-scale farming of livestock. These farms are designed to optimise the growth and health of animals, ensuring efficient production of meat and other animal products.
   
• Slaughterhouses: The company operates modern slaughterhouses that adhere to strict hygiene and safety standards. These facilities are equipped to handle large volumes of livestock, ensuring humane processing and highquality meat products.
   
• Food Processing Units: Japfa’s food processing units produce a variety of packaged foods, including ready-to-eat and readyto-cook products. These units ensure that the final products meet high standards of quality and safety, catering to consumer demands for convenient and nutritious food options.

Integrated Value Chain

CGSI noted in Oct 2024 key risks for Japfa include economic downturns reducing protein consumption and outbreaks of African Swine Fever (ASF) in their facilities, which could lead to significant one-off losses. Another risk is the potential for volatile raw material prices, such as soybean meal and corn, which could impact their profitability

Company Overview

• Japfa’s core business is centered around providing affordableprotein foods in Emerging Asia.
   
• Japfa operates a vertically integrated business model that spans the entire value chain from animal feed production to breeding, commercial farming, and food processing. This integration allows Japfa to maintain high standards of quality and efficiency across its operations.
   
• They produce a variety of protein staples including poultry, swine, and aquaculture products, ensuring a consistent supply of high-quality proteins to their markets

Headquarters and Facilities:

Headquartered in Singapore, Japfa employs over 37,000 people. It operates farming, processing, and distribution facilities in Indonesia, Vietnam, India, Myanmar, and Bangladesh. Japfa specialises in poultry, swine, aquaculture, and packaged foods, with a vertically integrated model covering animal feed, breeding, farming, and food processing.

Market Position and Achievements:

Japfa holds leading market positions in poultry production across Asia and has a significant presence in the animal feed market. Their strong market positions provide a competitive edge and enhance their distribution capabilities. In 2023, Japfa achieved a significant milestone by delivering live chickens from Indonesia to Singapore for the first time, supporting Singapore’s food security strategy. As part of its sustainability efforts, Japfa completed 8 out of 9 planned water recycling facilities in its poultry operations by March 2024, with the final facility expected by December 2024.

Strategic Positioning and Future Outlook:

Growth in Downstream Business: Japfa plans to strengthen its downstream business by developing its poultry processing and consumer products segments. This includes expanding retail sales through both offline and online channels.

Aquaculture Expansion: The company aims to grow its aquaculture division, which includes feed mills, hatcheries, grow-out farms, and seafood processing facilities. Japfa is focusing on advanced feed technology and sustainable aquaculture practices.

Vaccine Production: Japfa’s subsidiary, Vaksindo, continues to deliver steady growth and profitability by producing livestock vaccines. The company is expanding its vaccine production capabilities to support its operations in Vietnam.

Strategic Investments in Vietnam: Japfa has made Significant investments in Vietnam to establish a robust industrialized value chain for swine and poultry. This includes modern breeding and fattening farms, as well as a new poultry slaughterhouse.

Navigating Macroeconomic Challenges: Japfa is cautious about potential disruptions from geopolitical tensions and global inflationary pressures. The company plans to hold back on non-essential capital expenditures and recalibrate growth plans until there is a clear recovery in consumer demand and average selling prices.