TUF reported a strong sales performance in Q1/2006 with 16% growth from last year. Frozen shrimp, tuna products (canned and frozen), pet food and products for the domestic market topped the performance. The firm believes that its sharp focus on efficient management helped ward off pressure from a volatile economy.
Thai Union Frozen Products PCL. (TUF), the world's largest tuna packer and a major seafood processor and exporter in Thailand, announced its adjusted Q1/2006 net profit (before deducting extraordinary expenses) of Bt494.0 million for the quarter ending March 31, 2006, out of total revenues of Bt13,871.2 million.
According to Mr. Thiraphong Chansiri, President of TUF, the company's sales in Q1/2006 were Bt13,720.6 million, up 16% from Bt11,865.8 million a year ago. In U.S. dollar term, sales rose to USD350.5 million, indicating a growth rate of 14% from USD307.6 million in Q1/2005. Such growth could be mainly attributed to healthy sales in
pet food, frozen shrimp and tuna products (both frozen and canned).
The reported net profit was actually Bt432.8 million for Q1/2006 (EPS: Bt0.50), down 8.3% from a year ago, but it included a non-recurring merger and acquisition related expense amounting to Bt61.2 million. If adjusting for this extraordinary item, the net profit should have been Bt494.0 million, representing a growth rate of 4.64% from Bt472.1 million in Q1/2005.
With regards to the sales breakdown by product for the quarter, tuna products remained the most important category, contributing to 53% of the total, followed by frozen shrimp which accounted for 17%. The rest were composed of canned pet food (9%), canned seafood (8%), shrimp feed (5%), domestic sales (5%), and frozen cephalopod (3%).
Despite the global presence of TUF products, the firm has yet gained a significant access to the EU market, given its size, due to high import tariffs. Therefore, this region still represents a strong export growth possibility from the perspective of the firm's Thai operations. Thanks to the EU's restatement of Generalized System of Preference (GSP) privileges for Thai shrimp and canned tuna imports, resulting in lower import duties, since January 1, 2006, the firm expects to gain more share in this market this year. The GSP privilege will continue in effect for 3 years.
Mr. Thiraphong added "We responded to economic volatility by focusing on efficient management. This is meant to cut costs, increase productivity and adjust prices appropriately. With these measures in place, we should continue to achieve steady sales growth while maintaining our profit margins simultaneously."