TUF: Record Q2, Profit Up 137%

Thai Union Frozen Products (TUF), Thailand’s leading producer and exporter of canned and frozen seafood products, reported a record profit of 954.5 million baht in its second quarter where net profit surged by 136.6% from a year ago. Net profit during the first six months this year reached 1,607.5 million baht, up 63.8% from a year ago. Despite the current global economic crisis, the company’s strength in cost control and inventory management have propelled the company to a new height and assured that its ambitious target for the second half this year could be met. TUF’s president, Thiraphong Chansiri, stated that TUF’s net profit reached 954.5 million baht, an increase of 136.6% from last year’s 403.4 million baht. Earning per share was 1.08 baht, or a 134.8% hike from last year’s 0.46 baht. Sales revenues Thai baht term rose 2.4% from 16,792.3 million baht last year to 17,195 million baht this year. In US dollar term, however, sales revenues fell 4.2% from USD 518.2 million last year to USD 496.7 million this year. Total revenues for the second quarter increased from 16,900.2 million baht last year to 17,309.5 million baht this year, representing a growth rate of 2.4%. During the first half this year, net profit also grew 63.8% to 1,607.5 million baht, compared with 981.4 million baht a year ago. Meanwhile, sales revenues in Thai baht term rose 8.2% from 32,207.9 million baht to 34,861.4 million baht. Sales in US dollar term, nevertheless, dropped slightly by 0.1% from USD 996.5 million to USD 995.8 million. Total revenues for the first six months stood at 35,198.6 million baht, an increase of 8.2% from 32,531.2 million baht a year ago. Thiraphong revealed, “We are very satisfied with the remarkable growth rate and the level of net profit in this quarter. This is probably the second time in our corporate history that the year-on-year quarterly profit growth rate reached such a high level. Back in the second quarter of 2003, net profit jumped by 164.4% to 714.5 million baht. During that year, net profit for the first six months attained 1,461.5 million with a year-on-year growth rate of 154.2%. Back to this quarter, the outstanding performance is attributable to good cost control and efficient management of inventories, which substantially expanded the company’s profit margin relative to the previous year.” Thiraphong further explained, “Sales in Thai baht term is still on an uptrend despite the unfavorably strong value of Thai baht. We have undertaken necessary measures to manage the currency risks and been closely monitoring any movement in the international financial markets. As for sales in US dollar term, this quarter saw a slight decline as a result of the general price decline in raw materials from last year, leading to corresponding downward adjustments in our selling prices. Overall sales volume in tonnage grew 4%, compared with the same period a year ago, keeping the decline in sales value to a minimum. Even with slightly lower sales, the company managed to achieve extraordinary growth in margins and net profit.” Tuna products retained the largest share in the company’s product portfolio at 43%, followed by frozen shrimp (20%), canned seafood (9%), canned cat food (8%), shrimp feed (7%), canned sardines (5%), products for the domestic market (5%), and frozen cephalopod (3%). Main export markets include the US, EU, Japan, Africa, the Middle East, Asia, Oceania, Canada, and South America. Nevertheless, Thailand’s overall export performance between January and June this year was not very positive. Export value declined by 17.1% in Thai baht term and 23.5% in US dollar term respectively, mainly caused by the global economic crisis. The fact that TUF was able to achieve strong growth in its quarterly and half-year net profits served as proof of the firm’s business strength and resiliency under adversities. Time and again, TUF emerged relatively unscathed and achieved respectable growth in times of economic crises. The company is thus confident that it can again meet its annual sales and profit growth targets during the rest of the year. Thiraphong concluded that the firm’s ability to expand gross margin to 16.15% from 13.34% a year ago helped boost net profit to a record level. Therefore, he expected his firm’s dividend payment for the first six month performance this year would also be a new record. That is based on TUF’s typical dividend policy of twice half-year payments at a rate of not less than 50% of earning per share of the period. For more information please contact: Corporate Communication Department Thai Union Frozen Products PCL. Tel. 0-2298-0024 ext.675-678

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