TUF announced its 2012's first-quarter results today while the Company is still going strong to make further commercial achievements. Quarterly net profit was recorded at Baht 1,467 million, equivalent to a 95% year-on-year growth. Sales growth was also observed both in US dollar and Thai baht terms at 11% each. Despite the fire incident at one of its shrimp processing plants early in the year, the Company managed to deliver robust quarterly performance, reflecting its strengths and solid business position of global brand leadership in the seafood industry.
Thiraphong Chansiri, president of Thai Union Frozen Products PCL. (TUF), the world's leader and expert on innovative and quality seafood products with global brand portfolios, revealed that, for the first quarter of 2012, the Company enjoyed a robust growth in net profit by as much as 95% to Baht 1,467 million, compared to its 2011 counterpart of Baht 760 million. Earnings per share for the quarter were Baht 1.53, up 94% from the corresponding period last year. Quarterly sales in US dollar term were USD 822 million, up 11% from a year ago. In line with sales in US currency, sales in Thai baht term also grew equally by 11% from Baht 22,706 million in 2011 to Baht 25,304 million in the quarter. Total revenues for the quarter amounted to Baht 25,678 million, up 12% from the first quarter of 2011.
According to further explanation given by Khun Thiraphong, the overall performance for the quarter was close to sales growth target. Normally, the first quarter is typically the slowest quarter of the year. This year, however, the Company could generate excellent sales and net profit during the first quarter, almost the same as those figures reported in last year's strongest quarter (Q3/2011; sales were USD 831 million with net profit of Baht 1,561 million). Strong sales growth was seen across all product lines during the quarter while the gross profit margin rose to 17.2%, which was higher than 14.8% achieved in the first quarter a year ago. During the quarter, a fire incident took place at one of its Thai shrimp-processing plants in Samut Sakhon province. The firm consequently relocated its shrimp plant workers to its other shrimp-processing facility in Songkhla province. The fire did negatively affect the firm's first-quarter performance to some extent, but not considerably. In consideration of the overall performance for the quarter, the Company is confident that further profitable growth is well on track. The Company remains ready for achieving its USD 5,000-million annual sales target within 2015.
With regards to the fire incident, shrimp production has now been resumed to a normal level. The Company only suffered an insignificant financial impact as the damaged plant facilities and goods are fully covered by its insurance policy. The insurance policy also provides full compensation to the Company for any potential business interruption.
For this quarter, tuna products make up the largest share in the Company's product portfolio at 50%, followed by frozen shrimp (16%), canned pet food (7%), products for domestic market (8%), canned seafood (5%), frozen salmon (5%), shrimp feeds (4%), canned sardines and mackerel (5%) and frozen cephalopod (1%). Main export markets include the US (36%), European Union (30%), Japan (9%), domestic market accounts (10%), Africa (4%), Oceania (4%), the Middle East (3%), other Asia (3%), Canada (1%) and South America (1%) of total sales.
In 2012, the Company will implement more aggressive marketing strategies for its domestic market. Branding initiatives will cover both corporate brand and product brand to enhance stronger recognition among Thai consumers. In the past, the Company's strategies did not focus strongly on the domestic market because over 90% of its revenues were typically generated from overseas markets. However, branding will become an important business initiative for the Company from now on. To begin with, the Company's logo has been changed to convey an more international image to the public. The first commercial advertisement, depicting the fact that the firm is the true owner of a host of well-recognized global tuna brands, has been produced and aired on local TV channels in order to make TUF a more familiar name to Thai consumers. In addition, more public relations and advertising activities will be implemented all year round via mass media.
Thiraphong also updated on the Company's progress in an investment in Pakfood PCL. (PPC), which is also a leading Thai seafood processor and exporter, and the firm's progress in raising its registered capital. The Company has completed the purchase of PPC's common shares at the price of Baht 51 per share for 12 million common shares, or 40% of the total issued and paid-up shares of PPC. This strategic alliance should provide synergies to the seafood businesses of both companies. Concurrently, more efficient joint raw material sourcing should also become possible, thereby potentially saving costs on raw materials and increasing competitiveness in the long term. Regarding the increase of registered capital, the Extraordinary General Meeting of Shareholders No.1/2012 has also passed a resolution for the registered capital increase on April 10, 2012. Newly issued common shares through a rights-offering will be allotted to shareholders at the ratio of 5 existing shares per 1 new share at the price of Baht 50 per share. XR date was on April 20-24, 2012. Share subscription period has been scheduled for the forthcoming May 14-18, 2012. The Company anticipates that new shares from the rights issue should be allowed trading by the end of May. This registered capital increase will raise additional fund close to Baht 10,000 million, which will be used to finance future investment projects and also to accelerate repayment of loan commitments.
Corporate Communications Department, Thai Union Frozen Products PCL.
Tel: 02-298-0024 Ext. 609, 675-678