TUF profits jump six percent
Wednesday, 04 August 2010 15:52
Thailand’s leading seafood producer Thai Union Frozen Products PLC’s (TUF) operating results for the first half of 2010 saw profits rise by six percent on a three percent increase in dollar sales due to the expansion of the company’s product portfolio. All its overseas subsidiaries also achieved strong growth.
TUF President Thiraphong Chansiri
TUF President Thiraphong Chansiri said the company’s net profit reached THB1.704 billion (US$52.7 million), a six percent rise from the same period last year at THB1.608 billion (US$49.72 million). Earnings per share also grew by six percent from THB 1.82 (US$0.056) to THB1.93 (US$0.0597).
Sales revenue for the period in dollar terms was US$1,026 million, up three percent from 2009’s US$996 million. In Thai baht terms, sales revenue skid by four percent from THB 34.861 billion to THB 33.421 billion.
TUF still achieved continual sales revenue and profit growth in US dollars terms due to product diversification and all its overseas subsidiaries showed strong performance despite the volatility in prices of key raw materials and the baht’s seven percent appreciation.
Net profits fell by nine percent from THB955 million (US$29.5 million) in the second quarter of 2009 to THB873 million (US$26.99 million) as a result of rising costs of raw materials. TUF intends to follow its typical dividend payout policy of at least 50 percent of net profits as interim dividends.
For the second quarter, tuna products still constituted the largest share in the company’s product portfolio at 39 percent followed by frozen shrimp at 24 percent.
Main export markets include the US at 49 percent and the European Union (EU), Japan and the domestic market all each at 12 percent.
The major challenges that TUF had to face during first and second quarters this year included the foreign exchange situation and the costs of raw materials, as well as much greater fluctuations of shrimp and tuna prices. Unusually warm temperatures resulted in a delayed shrimp harvest and tuna prices soared to US$1,700 per tonne.
However, Thiraphong believes the situation will normalise in the last two quarters of the year. The company is confident that it can keep growing in the second half, as it is the typical high season.
Further, he expounded on the firm’s plan to buy leading European producer and distributor of canned seafood products MW Brands, stating that TUF’s board of directors voted on July 27 to acquire all of MW Brands Holdings SAS’s ordinary shares. This decision must be approved by the shareholders at a meeting to be held on September 2.
“With MW Brands’ sales contribution to the group, it is highly probable that this ambitious target would be achieved before 2012,” Thiraphong concluded.
Natalia Real (Fishing Information and Services)