July 29, 2004

Thai Union Sees 20% Hit To Profit This Year Due To Shrimp Tariffs

Thai Union Frozen Products Plc (TUF) says it expects net profit to fall 20 percent this year due to looming US anti-dumping duties on shrimp and high raw tuna costs

TUF expects annual sales to rise at least 15 percent from nearly $ 1 billion in 2003, according to president Thiraphong Chansiri.

"We expect net profit to drop 20 percent this year, which is quite satisfying amid many obstacles. The worst should be over this year and we should see a better year next year," he said yesterday.

TUF reported a net profit of 2.28 billion baht in 2003 and analysts polled by Reuters Research forecast it would make a profit this year of 1.87 billion baht, a drop of 18 percent.

Mr Thiraphong said the company's second-quarter net profit would exceed the 315 million baht earned in the first quarter. That would still be lower than the 714 million baht posted in the second quarter of 2003.

He did not give a profit forecast for next year, but analysts forecast a 22 percent rise in net profit to 2.28 billion baht. TUF's stock price has fallen 33 percent so far this year, underperforming the 16 percent decline in the Stock Exchange of Thailand index.

Concerns about the looming US anti-dumping duties pushed the company's shrimp exports to the US market down sharply to 15 percent of its total exports in the first half of this year, from 50 percent last year, Mr Thiraphong said.

Analysts said they expected the US Department of Commerce to rule favourably on import tariffs on Thai shrimp on Wednesday. If it does, that should push up Thai shrimp exports to the US market, they said.

The value of Thai shrimp shipments to the United States could fall at least 20 percent from 73 billion baht last year if anti-dumping duties were imposed, Mr Thiraphong said.