August 5, 2008

Thai Union Frozen Products PCL (TUF), Thailand's largest seafood processor and exporter by revenue, is expected to have a 7.7-percent decrease in second quarter net profit mainly due to projected loss in foreign exchange.

A Dow Jones Newswire poll of five analysts expect a net profit of THB 397 million (US$11.8 million) for the second quarter, down from THB 430.2 million (US$12.8 million) a year ago.

Analysts expect the company to book forex losses of THB 310-340 million (US$9.2-10.1 million) due to hedging transactions compared with a forex gain of THB 40 million (US$1.2 million) recorded in the second quarter last year.

An analyst from the Phillip Securities said the reversing trend from strong to weak of the dollar/baht during the second quarter is unexpected and that most exporters nearly fully hedged the currency regarding to their sales volume.

As of end-June, the US dollar was at THB 33.43, compared with THB 31.47 three months ago and THB 33.68 at the end of last year.

Still, the company's operations are expected to improve in the second quarter. TUF has increased product prices to reflect higher input costs while sales volume has grown due to expanding market share in Japan, the EU, Middle East, Africa and South Africa.

TUF is expected to release their second quarter result on Monday (August 11, 2008).