April 22, 2008

Thai Vegetable Oil reports strong profits in Q1

Thailand's Thai Vegetable Oil (TVO) expects strong profit of THB563 million in the first quarter of this year, up 116 percent on-year and 3 percent on-quarter.

The gain is attributed to widening spread margins, decreasing interest payments and higher contributions from TVO's subsidiary in China.

Sales volume in the first quarter slowed down from the previous quarter due to lower demand for soymeal from the pork industry.

However, it was offset by higher demand from chicken farmers and increasing soymeal prices.

Therefore, the company anticipates first quarter sales to be around THB5.821 million, close to the previous quarter or up 60 percent on-year.

Gross margins are expected to widen to 16.2 percent from 12.5 percent in the first quarter of 2007 and 15.9 percent last quarter due to domestic soymeal prices increasing 12.4 percent from the previous quarter to THB16.9 per kilo.

Meanwhile, soy oil prices increased from THB40 to THB41 per bottle at the end of last year to ceiling prices of THB49.50 per bottle.

TVO is projected to show continuous strong earnings growth in the second quarter of 2008 as soymeal demand from pig farmers recovers and demand from chicken farmers remains strong.