GFPT Public Company Limited (GFPT) Earnings Call Transcript & Summary

Good afternoon, everyone. It's my pleasure to welcome you on our webcast. My name is Veera Titayangkaruvong. I am Manager of GFPT. First of all, I would like to thank you for your interest in GFPT. Turning to our agenda on Slide 3. First, I will briefly introduce GFPT Group business and explain about the vertical integrated chicken production and financial results in 2025, and then I will discuss about the Thai broiler industry outlook and what we can expect in this year, 2026. GFPT aims to be a carbon-neutral organization by 2030 and achieve net zero carbon emissions by 2050. GFPT strives to be a leading chicken meat exporter with its fully vertical integrated chicken production. GFPT supported sustainable development goals, SDG, which was incorporated in the company's objectives and operations. For example, SDG2, zero hunger; SDG 4, quality education; SDG 5, gender equality; SDG 6, clean water and sanitation; SDG 8 decent work and economic growth; SDG 10, reduce inequality; SDG 13, climate action; and SDG 16, peace, justice and strong institutions. For various awards and achievements of GFPT in 2025, including we are certified to be a member of CAC for anticorruption policy and latest CGR rating score was 5 CG symbols Excellent for 7 consecutive years, and we also achieved the rewards from IAA Awards 2025 in agribusiness, including Best IR, Best CEO and Best CFO. GFPT Group is a vertical integrated chicken production starting from feed mill, grandparent breeder farm, breeder farm and broiler farm, chicken processing plant and further processing factory. GFPT is listed in the Stock Exchange of Thailand under agri business. And CG score, as I mentioned already, 5 CG symbols Excellent and the share price at the end of January 2026 was THB 9.55 per share, and average stock price in the fourth quarter of last year was THB 10.15 per share and the highest share price for the past 52 weeks was THB 11 per share and the lowest share price was THB 8 per share. And our share outstanding at 1.25 billion shares at THB 1 per share and market cap is almost THB 12 billion and free float portion about 67% and foreign shareholder portion about 8.6%. For our dividend policy, we pay not more than 50% of the net profit from separate financial performance after all reductions. And looking at the current shareholding structure, Sirimongkolkasem family being a major shareholder holds about 51.25% and the rest, including local individuals, 34.5%, local funds 5.7% and foreign institution about 8.5% and only 0.1% of foreign individuals. Next will be the group structure of GFPT Group. GFPT Group structure is quite simple. GFPT is a parent company of the group, which operates primary plant and further processing factory to produce fresh chicken meat and fully cooked chicken products. GFPT Group consists of 5 subsidiaries and 2 joint ventures. Each subsidiary handle different aspects of the vertical integration. GFPT holds 49% on both GFN and McKey and we use equity method to take 49% of the JV performance in the profit and loss. Next will be JPT fully vertical integrated chicken production, starting at feed mill. We currently have 2 feed mill facilities. KT1 produce animal feed and aquatic feed for domestic market, while KT2 produced only chicken feed for internal use. The major feed material consists of corn and soybean in which corn are sourced locally and soybean and soybean meal are imported from overseas. For the farm operation, we have 3 generations of chicken farm consists of grandparent breeder farm, parent breeder farm and the broiler farm. We import grandparent day-old-chick from overseas, grandparent breeder and parent breeder, the cycle is about 60 to 65 weeks, while broilers are raised for only 40 to 42 days to reach the target weight. The chickens are raised in a closed EVAP system with the strict biosecurity and we're also concerned about animal welfare and environmental enrichment, and we raise broiler in a sustainable way with a minimal impact to the environment. The cost range of GFPT is we are 100% own farm policy. So it means that we have no contract farming to make sure that our customer can trust in our chicken meat quality. All of our broilers are sold to GFPT 50% and the rest 50% are sold to GFN, the second joint venture for chicken meat processing and producing cooked chicken product for export. At the primary plant, chicken will be processed into main products and byproducts. The main products consist of the chicken breast, in a fillet chicken legs and chicken wings for export to international markets, while the byproduct consists of carcass, intestine and giblet which are sold for the domestic market. At the processing plant, the main chicken meat is processed as fully cooked chicken products such as chicken nugget, chicken patty, chicken croquette and chicken steamed and chicken roast. Next will be GFPT time line. Slide 12 briefly shows GFPT Group time line. GFPT Group has been in poultry business for 45 years. We established in 1981 to operate chicken processing under the BOI privilege for export to international markets such as the fresh chicken meat. And in 1990s, we became a fully vertical integration by having our own parent breeder farm, broiler farm, feed fill and also the sausage plant. And in 1992, we listed in the Stock Exchange of Thailand under symbol GFPT. And 1 year later, we joint ventured with the Keystone Food Corporation, the U.S.-based company to set up McKey Food Services Thailand Limited to produce chicken nugget and chicken patty for export to McDonald's store in Asia Pacific region, including Japan and Singapore. 2003, we did another backward integration by having grandparent breeder farms. 2008, we set up a new feed mill plant in Chonburi Province called K2 to produce chicken feed for internal use only. In the same year, 2008, we also announced the second joint venture with Nichirei Food Inc., the Japanese-based company to set up GFPT Nichirei Thailand Company Limited or GFN. The operation of GFN is quite similar to GFPT, the parent company. GFN operates both slaughterhouse and further processing plant and mainly export processed chicken product to Japan and other international countries such as U.K., EU and many countries around the world. In 2010, we did stock split from THB 10 to THB 1 per share for liquidity. And in 2017, we expanded a new sausage production capacity and focused on producing chicken sausage. McKey also finished the construction of its new further processing plant in Chonburi Province and currently, we GFPT are constructing the new slaughterhouse at Chonburi Province located near the new plant up McKey first [indiscernible] with a production capacity of 150,000 birds per day. When the operation is finished and the new McKey further processing plant the third line with cooked capacity of 30,000 metric ton a year. Next will be GFPT Group expansion plan for the next 3 to 5 years. First of all, the broiler farm capacity, we expect to reach 340,000 birds per day as well as the GFPT primary plant with a capacity of 150,000 birds per day. And the last one will be the GFPT further processing plant with a cooked product capacity of 30,000 metric tons per year. However, the expansion plan and investment budget can be adjusted depending on the change in the market condition and future competition. Next will be GFPT product line. Our product line consists of 3 categories being feed, farm and food. For the feed business, we have various animal feed products such as swine feed, layer hen feed, duck feed and cow feed and for the aquatic feed are the fish feed and shrimp feed. All feed products are sold to farmers, animal raisers and feed wholesalers in Thailand. For the farm business, we sell parent day-old chick and broiler day-old chick to chicken farmers. Live broilers are sold to GFPT and GFN only. And we began to sell cage-free eggs in 2020. Move to the feed business. Fresh chicken meat and parts can be exported as fresh frozen and also sold in the domestic market, such as wholesale market, OEM factories and food services or QSR. The cooked chicken products are exported to international markets, mainly to Japan, U.K., EU and China, while the processed food such as chicken sausage and meatballs are sold for the domestic market by our subsidiary, GFF, GF Foods. Next will be 2025 snapshot. In 2025, GFPT, the total revenue was THB 18.8 billion, decreased about 2.4% from 2024. The consolidated revenue breakdown by business, 48% food, 35% farm. And 17% feed and revenue breakdown by product consists of 23% chicken direct export and 10% for the indirect export that we sell the [ cutout ] chicken to OEM factory like McKey to process and export by itself. We may call this portion indirect export and 11% for the chicken byproducts such as the carcass, intestine and giblet for the domestic market and only 4% for the processed food, such as the chicken sausage and meatball. Move to the feed business. 6% animal feed, mainly from the swine feed and only 3% for the fish feed and 8% for the shrimp feed. And the last one will be the farm business consists of 28% live chicken that we sell to GFN and only 7% we sell the -- ship to outside. And if you look at the export revenue, the total is 23%. But in terms of the revenue breakdown by currency, we sell in terms of U.S. dollar by 20%. So it means that around 80% from every business feed farm food, we sell in terms of the Thai baht currency. So we have the rich exposure in terms of the FX only 20% in terms of U.S. dollar. Next will be the market position in 2025. GFPT ranked #2 in terms of chicken export. GFPT, GFN and McKey altogether, we export about 12% of the Thai chicken meat export and we raise and produce chicken only 6%, including GFPT and ranked #7 in terms of chicken production in Thailand. And we mainly export 26% to U.K. and 26% to Japan; Malaysia, 18%; EU, 12%; and China, 8% and the rest will be 10%. And chicken export by product, 60% cooked and 40% in terms of the raw chicken. Next will be the financial results in 2025. The top line revenue in 2025 was THB 18.84 billion, decreased by THB 474 million, about 2.45% drop from last year, mostly from the lower revenue from the food segment, from lower revenue from export processed chicken products. And consolidated revenue from sales in 2025 consists of Food segment, about 47%; Farm segment, 35.8%; and feed about 17.1%. In 2025, revenue from Food segment was THB 8,870 million decreased by THB 734 million or 7.6% year-on-year from lower revenue from export chicken product from lower sales volume of export of the chicken products. The total export of the company in 2025 was 33,000 metric tons, decreased by 3,600 metric tons or 9.8% year-on-year from decreasing in export volume of the processed chicken to U.K. Revenue from Farm business was THB 6,739 million increased by THB 304 million or 4.7% year-on-year from higher revenue from selling day-old chicks from higher sales volume and selling price of day-old chicks. The last one will be the revenue from the Feed sales was THB 3,231 million, decreased by THB 44 million or 1.35% year-on-year from lower revenue from aqua feed from its sales volume, especially for the feed sales volume. Next will be the consolidated income statement of 2025. The top line was THB 18.84 billion, 474% decrease (sic) [ THB 474 million decrease ] from 2024 or 2.45% drop year-on-year and the cost of goods sold was THB 15,759 million decreased by THB 886 million, 5.3% drop year-on-year, while the gross profit was THB 3,081 million increased by THB 412 million or 15.4% increase year-on-year and the cost of sales in 2025 contributed 83.65% of the revenue from sales decreased from 86.2% from last year, while the gross profit margin contributed about 16.35% in 2025 increased from 13.8% from 2024, mainly from lower feed raw material costs, especially soybean and soybean meal from overseas. And other income in 2025 was THB 364 million decreased by THB 75 million or 17% year-on-year, while the SG&A expense in 2025 was THB 1,469 million decreased by THB 101 million or 4.6% year-on-year since the lower freight cost and lower sales volume of chicken egg and SG&A percentage decreased from 8.1% in 2024 to 7.8% in 2025. And the profit from associates was THB 825 million, decreased by THB 9 million or 1.1% year-on-year, mainly from the profit contribution from Japan was THB 187 million in 2025, which decreased by THB 134 million or 41.6% year-on-year from the lower export volume of the processed chicken and the lower selling price of the domestic sales of the chicken parts and chicken byproducts. However, the profit contribution from McKey was THB 638 million increased by THB 125 million or 24% year-on-year from higher export volume of the cooked chicken. The interest expense of the group in 2025 was THB 102 million, decreased by THB 17 million or 14.5% year-on-year from the lower interest expense as the outstanding loan from financial institution decreased and income tax expense of the group in 2025 was THB 245 million, decreased by THB 21 million or 7.9% year-on-year from the higher deferred income tax revenue. Finally, the consolidated net profit in 2025 was THB 2,439 million, increased by THB 466 million, 23.6% increase year-on-year from the lower feed raw material cost and the net profit margin increased from 10.2% in 2024 to 12.95% in 2025. Next will be the financial results in 2025. The gross margin increased from 13.8% in 2024 to 16.4% in 2025 as well as EBITDA margin also increased from 21% in 2024 to 24.1% in 2025 and the net profit margin increased from 10.2% in 2024 to 12.9% in 2025 and the average exchange rate in 2025 was THB 32.88 per U.S. dollar. And earnings per share in 2025 was THB 1.95 per share and dividend payment in 2024 financial performance was THB 0.2 per share or 12.7% dividend payout ratio, while the ROA, or return on asset, in 2025 was 9% increase from 7.6% in 2024 as well as the ROE, or return on equity, in 2025 was 11.8% increase from 10.6% in 2024. Next will be the balance sheet in 2025 comparing to 2024. The total asset of GFPT Group in 2025 was THB 27,863 million, increased by THB 1,547 million or 5.9% increase year-on-year from increasing in cash and cash equivalents by THB 1,429 million and property, plant and equipment or PP&E of THB 323 million. Next will be the liability of GFPT Group was THB 6,167 million, decreased by THB 657 million or 9.6% drop year-on-year from the short-term loans from financial institution decreased by THB 620 million, and the shareholders' equity was THB 21,696 million increased by THB 2,203 million or 11.3% year-on-year. Next will be the cash flow activity in 2025. The consolidated EBIT in 2025 was THB 2,801 million, 18% increase year-on-year and the consolidated EBITDA was THB 4,535 million, 12% increase year-on-year. And for the cash flow activities in 2025, we have net cash received from operating activities about THB 3,140 million and the net cash used in investing activity about THB 785 million (sic) [ THB 758 million, ] mainly in the fixed asset expansion and also the grandparent and parent breeder investments and the net cash used in financing activity is about THB 953 million. Our ending cash at the end of 2025 was about THB 3,530 million, increased by THB 1,429 million from 2024. Next will be the book value increased from THB 15.5 in 2024 to THB 17.3 at the end of 2025. And for the interest-bearing debt position in 2025, the company had a total liability of THB 6.2 billion, comprising of the noninterest-bearing debt in the amount of THB 2.3 billion and interest-bearing debt in the amount of THB 3.85 billion. The interest-bearing debt consists of the short-term loans, about THB 380 million and the long-term loans about THB 3,470 million, and all loans are entire baht currency. We have no exposure in the foreign currency borrowings. The debt-to-equity ratio was only 0.28x. Next will be the capital expenditure. The investment budget is about THB 1 billion to THB 1.2 billion, mainly for the broiler farm, breeder farm and chicken processing factory expansion, and we plan to increase the number of the chicken about 10% or 20,000 birds per day per year. However, the broiler farm expansion plan can be adjusted due to the economics and industry situation. Next will be the global broiler meat market. In 2025, Thailand ranked #4 in terms of the chicken export and ranked #7 in terms of the chicken production in the global market. Thailand export chicken meat products to Japan, 39%; U.K., 16%; EU, 14%; and China, 7%; and other countries, 24%. And Thailand export about 53% in terms of the cooked chicken and 47% in terms of the raw chicken. Next will be the 50 years of the Thai chicken export. Thailand chicken meat export has been very strong since 1973, but after the bird flu outbreak in the beginning of 2004, Thai chicken industry is still strong by switching from export chicken meat -- fresh chicken meat to fully cooked chicken products. And after major importers such as EU and Japan lifted ban from fresh frozen chicken meat on Thailand since 2012, Thai chicken meat exports are still very strong. And in 2025, Thai chicken meat export break historical high with more than 1,300,000 metric tons or THB 165 billion. Next will be the global broiler meat market. Slide 31 shows statistic of the top 10 countries in terms of the global broiler meat market in 2025. For the global chicken production, U.S. is a market leader, followed by China, Brazil and EU and Thailand ranked #7 in terms of the total global chicken production. And in terms of the global chicken export, Brazil is a market leader, followed by U.S., EU and Thailand ranked #4. In terms of the global chicken meat import, Japan is a market leader, followed by Mexico, U.K. and EU. Next will be the commodity price. Slide 32 provides statistical data on selected commodity price for reference. The corn price in 2025 was THB 10.3 per kilogram decreased from THB 10.9 per kilogram in 2024, while the soybean meal price in 2025 was only THB 14.6 per kilogram, significantly decreased from THB 19.7 per kilogram in 2024. And average broiler price in 2025 is quite similar to 2024, which is around THB 38 to THB 39 per kilogram and the day-old chick price in 2025 was quite high at THB 18.5 per chick comparing to THB 16.1 per chick in 2024. And for the export price in 2025, we export to Japan about USD 4,800 per metric ton and export price to EU was about USD 4,400 per metric ton. Next will be the supporting and risk factors in this year. Starting from the supporting factors consists of the globally recognized food safety standard with the trust compartment and traceability system ensure that this is our control. The growing poultry demand from the rising population and economic boost demand for the affordable chicken price and cooked and processed chicken meat growth, rising demand for the ready-to-eat and convenient foods and strong export competitiveness. Thailand leads in processed chicken export with high production standards with the lower production cost from lower cost, enhanced price competitiveness for our producer. And the last one will be the economic and tourism recovery, the full-service growth, especially restaurant, fast food and street food. And moving to risk factor consists of the animal disease outbreak and hygiene risks. The global bird flu outbreak may reduce the supply of the grandparent and parent chick can limit the broiler production and global market competition, especially for the Brazil and U.S. outcompete with the lower feed material costs, the cost volatility and rising expense from the weather risks like the El Nino, La Nina may raise the feed cost despite the expected price decline, non-tariff measures also such as the labor and environmental standard may limit the Thailand's poultry competitiveness. Oversupply risk also another risk factor, which increased the production, mainly the market oversupply causing price decline and lower producer profit. And the last one will be the geopolitical risks or the trade impact may raise the feed cost. Next will be the guidance in 2026 and our management provide 2026 guidance with the 2% to 3% growth from 2025 and the anticipated GP margin would be around 15% to 16% and SG&A expense should be around 7.5% to 8% and other ratios such as financial cost and effective tax rate will be quite similar to 2025 in terms of percentage. And the CapEx in this year would be around THB 1 billion to THB 1.2 billion for the fixed asset investment. And the last topic will be the key statistics. Slide 35 (sic) [ Slide 36 ] shows the key statistics relating to the core business. Chicken meat, our food business and also the feed business contributes about 65% of the consolidated revenue of GFPT Group. In 2025, export volume decreased by 10% or equal to 33,000 metric ton export volume in 2025, mostly from decreasing in export volume of the cooked chicken product to U.K., while indirect export volume to McKey in 2025 also decreased by 6% year-on-year and the domestic sales volume in terms of the byproduct slightly increased by 1% year-on-year. And move to the domestic and feed -- domestic feed market. Sales volume of animal feed, especially for the swine feed increased by 15% and the fish feed decreased by 8% year-on-year. And the last one will be the shrimp feed sales volume slightly increased by 1% comparing to 2024. We would like to thank all of you to join our webcast today. If anyone would like to have more information about GFPT Group, including the latest annual report and result presentation, please visit our website, www.gfpt.co.th or contact our IR department. Thank you again, and see you next time.