Bangkok--15 May--TUF
TUF reported net earnings growth in Q1/2007 despite the pressure of a slowdown in the domestic economy. Sales in dollar term reached USD361.6 million, representing a growth rate of 3% from the same period last year while net earnings soared by 27%. Improved efficiency and effective cost controls within plants and positive performances of its US-based subsidiaries led to this encouraging result.
Thai Union Frozen Products Public Company Limited (TUF), Thailand's major processor and exporter of canned and frozen seafood, announced a growth rate of 3% in sales from USD 350.5 million in Q1/2006 to USD 361.6 million during Q1/07 while net earnings surged to Bt 527.7 million, up 27% from the same period last year. However, sales, in Thai Baht term, were Bt 12,801.5 million, down 7% from Bt 13,721.1 million in Q1/2006 while total revenues dropped to Bt 13,027.6 million, down 6% from Bt 13,871.6 million in Q1/2006. This decline was primarily a result of Thai baht appreciation during the period. Thai baht appreciated by as much as 10% against US dollar over the same period last year. Despite this, the company managed to earn a net profit of Bt 0.60 per share, up 25% from Bt 0.48 a year ago.
Thiraphong Chansiri, the president of TUF, explained, “During the first quarter, we managed to earn more profits increased 27% than last year, thanks to tight cost controls and improved operational efficiency which drove down the costs. Moreover, our hands-on financial control also helped reduce our interest burden. Furthermore, the operating performances of our US subsidiaries were quite positive during the period. Our sales in US dollar term managed to grow further. However, Thai baht continued to strengthen against US dollar, which has been almost 10% stronger than in the same period last year, directly hitting our sales in Thai baht term. Thanks to all the cost cutting measures mentioned earlier, we have been successful into achieving an operating margin and absolute operating profit better than those of last year. ”
Tuna remained the biggest contributor, taking up 54% of the group’s total sales, followed by frozen shrimp at 18%, canned seafood and canned petfood at 8% each while shrimp feed, products for the domestic market and frozen cephalopod accounted for 6%, 4% and 2% respectively. The US was the leading market for TUF’s products, followed by the EU, Japan, Asia, Africa, Australia, the Middle East and South America respectively.
Thiraphong elaborated, “The U.S. is our prime export destination. As much as 55% of our sales were generated from the U.S. market during the quarter. The EU is the second largest market for us at 12% share. However, Japan could be the most promising and vibrant export market, which would require us more attention, as a result of the signing of Japan - Thailand Economic Partnership Agreement (JTEPA). The agreement will make us more competitive in exporting shrimp to Japan in the fresh, chilled, frozen and cooked forms. This will also support exports of canned tuna and canned pet food. Most of these items will enjoy duty-free status into Japan in the near future”.
“High Health (Thailand) Co., Ltd. is involved in research and development of new high quality shrimp breeds, post larvae and nauplii, which would be distributed to shrimp farmers for a commercial purpose. This investment helps further the group’s strength in processing and exporting shrimp, thanks to a more integrated process, starting from breed selection, hatchery, processing up to distribution to retail outlets. This truly sharpens our competitiveness and potential in the shrimp business,” Thiraphong commented on a recent investment by Thai Union Feedmill, one of the group’s subsidiaries.
In 2007, TUF will launch new ready-to-eat frozen food products under the brand of “My Siam by Khun Reed”. The new products will be marketed and distributed in Thailand by T-Holding Co., Ltd. by the end of May. The company unveiled its “My Siam by Khun Reed” for the first time early this year, which was already being distributed to a few European countries. The first batch of new products will feature five of the top-ten most popular Thai dishes, namely Prawn in Green Curry, Salted Prawn with Garlic, Spicy Shrimp with Basil Leaves, Tom Yum Kung, and Sauteed Salmon in Chilli Paste. Products under “My Siam by Khun Reed” have enjoyed strong acceptance by consumers since its debut.
“We give a lot of importance to re-aligning management, defining proper marketing strategies and developing new products with the ultimate objective of providing products which would meet consumer needs. All of these efforts are critical since they would help us deliver steady growth of revenues and profit and allow us to become competitive in the global marketplace,” said Thiraphong.
For more information please contact
Wisaka
Supervisor of Corporate Communications Department.
Thai Union Frozen Products PCL.
Tel: 66 2298 0024, 66 2298 0537-41 ext. 677.
Fax: 66 2298 0024, 66 2298 0537-41 ext. 679.
e-mail: [email protected]
Web Site: www.thaiuniongroup.com