Bangkok--14 Aug--TUF Thai Union Frozen Products Public Company Limited (TUF), Thailand’s major processor and exporter of canned and frozen seafood, just reported its Q2/2007 operating result which, in contrast with market expectations, saw its net profit soar by 26% from the same period last year thanks to proactive cost management and inventory control. In spite of the pressure from strengthening Thai baht, the firm managed to grow its sales by more than 14% in US dollar term while 4% in Thai baht term. Sales of tuna and shrimp products continued to grow. The management remains confident that the Company is well on track to achieve its growth target in the second-half of the year. Mr. Thiraphong Chansiri, president of TUF, said, “During the second quarter, we made a net profit of Bt430.2 million which represented 26% growth from Bt340.7 million during the same period last year while earning per share was Bt0.49, up 26% from Bt0.39. Sales grew in US dollar term as well as in Thai baht term. We generated sales worth USD396.4 million, up 14% from USD346.6 million a year ago. In Thai Baht term, we achieved sales amounting to Bt13,728.4 million, representing 4% from last year’s Bt13,186 million. The total revenues for the quarter rose 5% from Bt13,259.9 million to Bt13,877.8 million.” For the first half of 2007, the firm earned a net profit of Bt957.9 million (EPS of Bt1.10), representing 27% growth from a year ago when the net profit was only Bt756.1 million (EPS of Bt0.87). Meanwhile, sales during the first 6 months surged to USD757.9 million, equivalent to 9% growth from USD697.1 million last year. TUF ended the quarter with total assets worth Bt27,443 million. “In the second quarter, the appreciation of Thai baht against US dollar remained achallenge to our business because as much as 90% of our sales were for exports which earned US dollar. In response, we have implemented a series of internal measures to cope with the unfavorable situation. Efforts have been spent to minimize any impact from cost inflation and exchange rate volatility. For instance, we devise measures to manage our foreign exchange exposure in order to hedge our position against the strengthening Thai Baht, though execution will still be subject to periodic market situations. In addition to foreign exchange management, we devoted a lot of time and efforts to cutting costs through improving operational efficiency. Externally, we diversify our business to dilute risks which can be a result of overdependence on any single market or product. This is highly evident from the almost even sales contribution between our local and overseas businesses. Thanks to these policies and measures, we managed to weather the difficulties present in the second quarter, say as much as 8% appreciation of Thai baht against US dollar since a year ago, and managed to report some decent growth rates from last year. Net profit, sales in dollar term, sales in Thai baht term and total revenues were up 26%, 14%, 4% and 5% respectively. We remain confident on our corporate objective of continual growth. We are committed to continuously expanding our customer base, expanding into new markets with good potential and driving product innovations in order to tap any emerging business or investment opportunities related to our core businesses. We have to do all of these things to keep ourselves competitive and further enhance our position in the global,” added the president. “Sales of tuna and shrimp, our main products, grew by 14% and 9% respectively in US dollar term during the quarter, largely contributing to the 9% overall sales growth during the period. This achievement was significant especially during the time that the skipjack tuna price (the key raw material for canned tuna) was near its historic high. The surge of skipjack prices was considered steep. It rose from the average of USD990 per metric ton in March to USD1,200 per metric ton in July. It made the quarter one of the most challenging periods for the industry in the past decade. Thanks to our proactive cost control, we can so far cope with it. Despite this, we anticipate that the unfavorable tuna price situation should be short-term. Tuna prices should be become more reasonable entering the fourth quarter this year. As for our shrimp products, we see continual growth from our US subsidiaries Empress International and Chicken of the Sea Frozen Food (officially Tri-Union Frozen Foods) which have both reported encouraging results so far this year. Both firms are US-based importers and distributors of frozen seafood products with focus on shrimp products. The quarterly sales were dominated by tuna products, which accounted for 50% of the overall sales, followed by frozen shrimp with 19%, canned seafood 9%, canned pet food 8%, shrimp feed 7%, domestic sales 4% and frozen cephalopod 3%. Major markets are namely the U.S., the EU, Japan, Asia Pacific, Africa, Australia, Middle East, Canada and South America. Mr. Chansiri concluded, “It is quite clear that this would once again be a challenging year for the industry given the presence of a host of negatives factors, namely strengthening Thai baht, high oil prices and high fish prices. Nevertheless, investors should be rest-assured that we are closely monitoring the situation and have been deploying appropriate measures to ensure continual growth and a proper return to them.” For more information: Corporate Communication Department Contact person: Auranut Simasanti Email: [email protected] Tel: (662) 298-0024 ext. 675 - 678 Fax: (662) 298-0024 ext. 679 Click for photo release at www.thaipr.net