TUF's net profit plummets by 60pc in 2012 Q4

News 08:02 22/03/2013 502
Thai Union Frozen Products Public Company Limited (TUF) has released its figures for Q4 2012 showing a net profit drop of a whopping 60 per cent to THB 612.4 million (USD 20.4 million) from THB 1.5 billion (USD 49.9 million) achieved in Q4 2011.

This is the lowest net profit TUF has had in the past eight quarters.

Throughout the whole year, profits skidded by 8 per cent, from THB 5.1 billion (USD 169.9 million) in 2011 to THB 4.7 billion (USD 156.6 million) in 2012.

The firm has explained that one of the main reasons for the lower profit was the tuna cost: it fell from the highest figure of USD 2,350 per ton in September to USD 1,900 per ton at the end of the year, which affected TUF’s profit margin earned in Q4.

Another obstacle the company faced is the regular fluctuation of the shrimp business because of the severe Early Mortality Syndrome (EMS) that led to many shrimp deaths, causing a shortage of the shellfish for production and overpriced shrimp.

The third challenge is that the US business did not grow as well as TUF had expected because of the strong and continuous price competition.

Regardless, TUF said, it believes that the above factors might have been temporary.

Analysts believe that tuna prices may recover in this first quarter and that the shrimp business should begin to look up in the second quarter, Reuters reports.

In Thai baht term, sales were reported at THB 26.3 billion (USD 876.2 million) in the fourth quarter of 2012, up 1 per cent from THB 26 billion (USD 866.2 million) in the fourth quarter of 2011. For the year, TUF reported a 6 per cent jump in dollar sales and 8 per cent in baht sales from THB 98.7 billion (USD 3.3 billion) in 2011 to THB 106.7 billion (USD 3.6 billion) in 2012.

“Considering our performance in the first nine months, we were still able to grow well especially in the 3rd quarter. Our sales and profits were able to reach New Highs outstandingly,” TUF Directors Kraisorn Chansiri and Chuan Tangchansiri wrote in a statement.

“Even though our overall annual profits did not meet the goal set, we were able to make some profits,” they highlighted.

President Thiraphong Chansiri said the company is aiming for 2013 revenues of USD 4 billion up from USD 3.4 billion in 2012, and anticipates revenues to reach USD 5 billion in 2015.

To get there, TUF will invest THB 6 billion (USD 201.5 million) a year over 2013-15 and plans to build two new plants in 2013, when it expects a higher net profit with a gross profit margin of 16 per cent.

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