April 30, 2008

Strong baht and volatile tuna prices may dampen TUF Q1 profits
 

A strong baht and volatile tuna prices could hurt the first quarter earnings of Thai Union Frozen Products (TUF).

Net profit could reach THB 535 million (US$16.9 million), up 1 percent on-year. Normalised profit is expected at THB 375 million (US$11.8 million), down 13 percent on-year.

Gross margin is projected to fall 2.2 percent mainly due to higher tuna prices.

Tuna prices have soared to a new high at US$1,600 per tonne due to rising oil prices. The baht also appreciated by about 9 percent on-year after the lifting of capital controls.

However, TUF is forecast to deliver strong sales growth of 19 percent on-year to THB 15.2 billion (US$478.5 million) due to high sales volume of tuna, shrimp and pet food.

Sales price have also been adjusted to cover high production costs, and sales in US dollar should increase 30 percent on-year.

TUF is expected to fulfill its target growth of US$1.2 billion this year. To reflect rising raw material costs, 2008 earnings forecast has been reduced by 10 percent to THB 1.7 billion (US$54.9 million).