- Based on 2022 preliminary unaudited results, CNPF achieved revenue growth of 14% year-on-year.
- The Branded segment outperformed, delivering a 16% increase versus the prior year driven by resilient domestic demand for value-for-money goods.
- Gross margin was largely sustained at 23.1%. Net income reached Php 5.0 billion, a 6% growth rate versus 2021.
Century Pacific Food, Inc. (PSE:CNPF), one of the leading branded food and beverage companies in the Philippines, released its full year 2022 unaudited financial results. Sales rose by 14%, exhibiting continuous growth momentum amidst a challenging macroeconomic landscape. On the other hand, net income increased by 6%, impacted by inflationary pressures on the cost side.
In 2022, the Company achieved Php 62.2 billion in consolidated revenues, buoyed by the outperformance of its Branded business, which represents the majority of CNPF’s topline. The segment, which is composed of Marine, Meat, Milk, and other emerging businesses, grew by 16% versus the prior year on the back of resilient domestic demand.
Meanwhile, CNPF’s OEM exports business posted a 4% increase on top of its high base from the previous year, notwithstanding global supply chain pressures encountered in 2022. Despite a slow start, the exports business saw improvements in the second half of 2022 due to favorable movements in freight rates, forex, and commodities.
Chad Manapat, CNPF’s Chief Finance Officer, said, “Century’s all-weather portfolio did much of the heavy lifting in 2022, whether from a topline or gross margin perspective. On the sales side, our affordable and accessible brands like Fresca and Lucky 7 allowed the company to serve the needs of value-seeking consumers, especially during an inflationary time. We saw local demand remain resilient in a year where more Filipinos gained employment because of the reopening. We recognize that consumers had to prioritize spending and are humbled to see that they continue to patronize our brands, leading to double-digit growth.”
“On the profitability side, because of the Branded segment’s outperformance, we saw a favorable mix impact, which allowed us to sustain gross margins in 2022,” he added. Amidst rising input costs, CNPF’s gross margin landed at 23.1% for the year, softening by 20 basis points compared to the prior year. The Company attributes the muted contraction to a favorable business mix and cost optimization measures.
Sustained gross margins gave CNPF the capability to support brand building activities, demand generating programs, and recently launched innovations. However, the company also saw higher logistics costs for the year. Thus, operating expenses as a percentage of sales increased to 14.0%, leading earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by 6% in 2022.
CNPF’s operational performance resulted in healthy cashflow generation. Operating cashflows amounted to Php 2.3 billion for the year. The Company was able to maintain a healthy balance sheet at the end of 2022, with Net gearing ratio at 0.20x and net interest-bearing liabilities to EBITDA at 0.75x.
“We have been navigating through choppy waters for quite some time but have been fortunate enough to deliver a consistent growth performance year-on-year. Our strong cash generation allows us to continuously fuel long-term growth, invest in sustainability, and provide our shareholders with satisfactory returns,” said Manapat.
In 2022, CNPF spent Php 1.4 billion in capital expenditures, completing the 50% expansion of its coconut OEM facility. On the M&A front, it also acquired a heritage marine brand, Ligo, a strategic move that strengthens its core sardine business, generating more than 700 quality manufacturing jobs.
The Company announced the completion of its initiative to plant 1 million coconut trees and donate these to smallholder coconut farmers in Mindanao. The program was launched in partnership with GCash, the country’s largest e-wallet, and impact organization HOPE to help boost livelihood of smallholder farmers.
During the year, CNPF in partnership with RSPo Foundation, celebrated the 12th anniversary of Kain Po, its flagship feeding program. Through Kain Po, the group was able to deliver a milestone 10 million protein servings to over 300 thousand beneficiaries nationwide in 2022. CNPF also partnered with Gawad Kalinga to form the Zero Hunger Alliance, a coalition of organizations that seeks to help alleviate hunger in the Philippines, in line with the United Nations Sustainable Development Goals.
Manapat shared, “The financial performance in 2022 was a result of CNPF’s all-weather and resilience-focused business model. We approach 2023 with cautious optimism – focused on delivering topline and bottomline growth but cognizant of our consumers’ plight, considering persistent inflationary pressures. We have some inventory overhang from 2022, which may cause bottomline to lag in the first half, but expect margin improvements as commodities ease. While we still see uncertainties marring the landscape, we continue to navigate and adapt to create value for our stakeholders and remain resolute in our mission to deliver affordable nutrition to Filipino families.”