TUF's business involves staple food products. (Photo: TUF)
TUF's sales and net profit on the rise
Friday, August 10, 2012, 23:50 (GMT + 9)
Higher raw material costs mean tuna company Thai Union Frozen Products Plc (TUF) might not achieve its revenue growth target of 15 per cent. However, both sales and net profit have grown for the firm.
"If TUF wants to achieve 15 per cent growth in 2012, revenue must grow by 20 per cent in the second half," announced deputy general manager Wai Yat Paco Lee at a Stock Exchange of Thailand (SET) this week.
"I think we'll likely make it, but it won't be easy," he added.
He noted that last year's revenue mark hit about THB 100 billion (USD 3.2 billion) and said the price of raw tuna has climbed by 40 per cent since last year, which may have a psychological impact on customers' purchasing decisions when market competition is high, Bangkok Post reports.
TUF had a net profit jump of 21 per cent to THB 2.47 billion (USD 78.4 million) in the first half of the year, as sales rose by 10 per cent to THB 52.1 billion (USD 1.7 billion) year-on-year.
However, in Q2 2012, net profit fell by 22 per cent year-on-year to THB 1 billion (USD 31.2 million) despite an 8 per cent surge in sales to THB 26.8 billion (USD 850.8 million).
The drop in profit was mainly attributable to an extraordinary item worth THB 400 million (USD 12.7 million) due to amortisation of a deferred finance fee incurred by the acquisition of MW Brands last year. Without such payment, profit rose by 9 per cent from year-on-year to a record high of THB 1.4 billion (USD 44.4 million).
TUF president Thiraphong Chansiri said the overall performance in the first half of the year demonstrates the company’s continued growth despite a price hike in raw materials, persistent volatility of the national currency and economic volatility in the west.
"Our business involves staple food products for basic consumption," he said. "Persistent economic crisis may even help the company to cover new potential investment opportunities in Europe."
Although TUF faces relatively tough market competition in the US, it still presents strong results and profit margins.
TUF will capitalise on emerging opportunities from the upcoming Association of Southeast Asian Nations (ASEAN) Economic Community for its greater aggressive regional presence. The firm is also exploring opportunities in Myanmar, Vietnam, Laos and Cambodia.
Thiraphong assured that Europe's economic crisis has had no negative impact on the group and that MW Brands in Europe continued to deliver a robust performance with stable margins.
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