Bangkok--27 Feb--TUF TUF announced its full year 2007 and Q4/2007 operating results with sales of the fourth quarter growing by 22% in US dollar term and 13% in Thai Baht from the same period last year. This was achieved amid of a host of unfavorable external factors, namely strong Thai Baht, high raw material prices and high operating costs as a result of the record oil price. This achievement demonstrates the capability of the management team and their commitment to excellence that are essential to the firm’s future success. Built on this confidence, the firm strives to grow its dollar sales by another 12% this year. Mr. Thiraphong Chansiri, president of Thai Union Frozen Products PCL. (TUF), Thailand's largest processor and exporter of canned and frozen seafood, stated, “In Q4/2007, we managed to achieve sales of USD450.7 million. This represents 22% growth from USD370.9 million in Q4/2006. In Thai Baht term, our annual sales grew from Bt13,495.6 million in 2006 to Bt15,253.6 million in 2007, representing 13% growth. Total revenues also grew 13% from Bt13,572.6 million in 2006 to Bt15,388.1 million in 2007. Our net profit for Q4/07, however, amounted to Bt443 million, down 13% from Bt509.8 million in Q4/2006 due to rising operating costs.” “After all, 2007 is considered a good year in terms of sales. Our dollar sales grew 11% to USD1,611.9 million from USD1,457.2 million in 2006. But in Thai baht term, sales only grew by 1% to Bt55,507.1 million from Bt55,038.6 million in 2006 while our total revenues also rose only 1% to Bt56,072.1 million from Bt55,444.4 million a year ago. Throughout the year, we were hit hard by many negative factors, but we managed to pull it through and stay profitable. Net profit for 2007 was Bt1,823.3 million, down 4% from Bt1,901.3 million last year. EPS dropped by 5% to Bt2.08 from Bt2.18 in 2006” On the lower Q4/2007 net profit, Thiraphong explained, “There were many factors adversely affecting our costs, namely record high tuna prices, strong Thai baht and higher expense related to the high global oil price. These factors pushed up costs of packaging materials, transportation and raw materials that in turn depressed our margins. Our 2007 full year net profit was also lower than that of the previous year. This was partly contributed by the strong Thai baht that appreciated by 8.8% from last year. Except for these uncontrollable factors, we did manage to keep our internal costs under control. More importantly, we also took advantage of this tough industry situation to grow sales and gain more market shares. This was made only possible by the active support of the manufacturing facilities within the group. Many product registered strong sales growth in 2007, especially canned sardine and cephalopod which grew by 31% and 19.5%, respectively.” In 2007, sales consisted mainly of tuna products that constituted up to 50% of the total amount. Ranked second was frozen shrimp (20%) and followed by canned seafood (9%), canned petfood (8%), shrimp feed (6%), domestic products (4%) and frozen cephalopod (3%) respectively. The EU is the export destination that offered a promising outlook. Sales to this market accounted for 12% of the firm’s total sales, up from 10% in 2006. Thiraphong also shared his view on 2008, “Our business is still very healthy with potential to grow further. We are confident to achieve dollar sales growth of 12% this year. This target is based on the fact that the market condition is likely to improve. For instance, tuna prices, though still at high levels, are now moving downward gradually. We understand high tuna prices were caused by poor catching. In turn, this was directly affected by the climate change, instead of depletion of fish stock. Bearing this mind, I believe that fish supply should tend to become more volatile rather than simply short, so does the tuna price. On another front, Thailand would probably cut its interest rates further, following US rate cuts. That should be also positive to us in form of lower interest expenses. “ “Although many external factors are beyond our control, but we are able to neutralize some through using proper risk management tools. For instance, we constantly hedge our foreign exchange position using forward contracts to protect us against Thai baht volatility. We see this as a critical and necessary measure. Besides, we also strive to improve efficiency internally to keep our costs competitive. Our cost-plus pricing policy is also helping to keep things manageable. We should see more positive benefits from JTEPA on our tuna and shrimp exports this year. Last but not least, with all these measure and external factors in place, we remain confident that we can continue to grow and provide an appropriate return to our shareholders,” Thiraphong added. Corporate Communications Department Tel: 02-2980027 ext. 675-678 E-mail: [email protected]