ublished May 13, 2009

Forex loss dampens Cerebos Q2 results

Quarter's net profit drops 21% to $12.4m

By VEN SREENIVASAN

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CEREBOS Pacific's second quarter earnings slipped due to a sharp retracement in the Australian and New Zealand currencies, which account for half its turnover.

Mr Koike: 'Due to uncertainty in the global economy, the group expects the rest of the year to be difficult.'

Net profit for the January-March 2009 second quarter fell 21 per cent to $12.4 million, from $15.7 million. Meanwhile turnover slipped 4 per cent to $183.7 million, from $191.3 million.

The company, which makes the well-known Brand's Essence of Chicken health supplement, incurred an exchange loss of $17.5 million during the January-March quarter.

Excluding this amount, turnover would have been 5 per cent higher than the previous corresponding quarter.

For the first six months ended March 31, net profit eased 6 per cent to $42.6 million, from $45.4 million. Turnover was down 3 per cent to $407.4 million, from $419.7 million.

Excluding the $44 million exchange loss, turnover would have been 8 per cent higher than last year.

The company's president & CEO, Eiji Koike, said the results were reasonable considering the overall economic environment.

'They reflect the resilience which stems from our strong branding and our focused strategic approach to invest for long- term stakeholder value growth.'

Growth in the health supplements business was led by Thailand, Malaysia and Singapore.

Australasia showed improved coffee business performance boosted by the recently acquired Toby's Estate coffee brand in Australia while New Zealand performance showed gains across most product categories.

'Overall our strong brands in health supplements, coffee and sauces have been only slightly impacted by the weak consumer sentiments and continued to maintain their category and market leadership positions,' the company said in a statement.

'Our strategy of strengthening brand equity, investing in innovations and expanding & upgrading our manufacturing capabilities will ensure we maintain a steady course and enable us to move forward rapidly when global economic conditions improve.'

But going forward, Mr Koike expressed reservations about the operating environment.

'Due to uncertainty in the global economy, the group expects the rest of the year to be difficult.'

But the company said it would continue to make significant investments in brand building, research & development and capacity expansion. Cerebos does not pay dividends until year-end.