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FOOD PROCESSING
CHAROEN KITTIKANYA
Thai Union Frozen Products Plc (TUF), the country's largest processor and exporter of canned and frozen seafood, has raised its 2008 sales target to over US$2 billion from an earlier target of $1.8 billion.
''Strong sales growth in the first half this year is a positive sign for us. It shows the potential of our business and our strength,'' TUF president Thiraphong Chansiri said in a statement yesterday.
TUF reported second quarter sales of $518.2 million, up 30.7% from the year before. In baht terms, sales totalled 16.79 billion baht, up 22.3% from the year before. Total second-quarter revenues rose 21.6% year-on-year to 16.87 billion baht.
Net profit for the quarter was 430.2 million baht, down 6.2% from the year before, due largely to exchange rate fluctuations.
Mr Thiraphong said exchange rate fluctuations were expected to be less critical for the second half.
''TUF is in an export business that earns revenues mostly in foreign currencies, we therefore normally employ financial instruments to hedge against risks from currency fluctuations,'' he said. ''Even so, we are still subject to accounting gain or loss when the exchange rate experienced huge fluctuations as seen in the first half of the year. We have been successful in managing our foreign exchange position all along and will continue to use this policy to protect our margins.''
For the first half, net profit rose 2.6% year-on-year to 982.7 million baht, with total revenue up 20.9% to 32.53 billion.
''We do expect to see even more solid and substantial improvements in our performance in the third quarter or beyond, especially due to the fact that the third and fourth quarters are typically our high seasons that often produce strong performances,'' Mr Thiraphong said.
''Thanks to sales momentum so far, I believe we stand a good chance to break $2 billion this year. Our original sales target was to reach $1.8 billion in 2008, and $2 billion in 2009.''
According to Kim Eng Securities research, TUF should continue to experience ongoing growth, thanks to a weakening baht. Forex gains or losses are forecast to decline, compared with the first and second quarters.
As well, the brokerage said, TUF's Chicken of the Sea brand would benefit from another price increase following new product launches and repackaging.
TUF shares closed yesterday on the Stock Exchange of Thailand at 17.10 baht, up 60 satang, in trade worth 22 million baht.
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