Mr. Thiraphong Chansiri, President of Thai Union Frozen Products PCL. (TUF), announced that 2008 sales in dollar term were recorded at USD2,069.5 million, up by 28% from USD1,611.9 million in 2007. The figures represented a 24% increase in Thai Baht term from Bt55,507.1 million in 2007 to Bt69,048.1 million in 2008. Total annual revenues were Bt69,519 million, representing 24% year-on-year growth from Bt56,067.2 million. In addition, total annual net profit amounted to Bt2,200.5 million, a 21% growth from Bt1,823.3 million in 2007. Earning per share was Bt2.51, up by 21% from that of 2007. In summary, 2008 was a successful year for TUF, with strong growth in sales and profits in times of volatile market conditions.
As for Q4/2008 performance, TUF registered growth both in dollar and Thai Baht terms. Sales in dollar term increased by 17%, from USD450.7 million in 2007 to USD528.1 million in 2008. In line with the dollar sales growth, Thai Baht sales were recorded at Bt18,409.5 million, or 21% growth from Bt15,253.6 million in 2007. In addition, total quarterly revenues jumped 20% from Bt15,383.2 million in 2007 to Bt18,455.2 million in 2008. Quarterly net profit was Bt307.1 million, a decline of 31% from Bt443 million in 2007.
Mr. Thiraphong’s further commented that during Q4/2008, TUF managed to maintain satisfactory sales growth amidst highly volatile risk factors although performance was not as robust as those achieved in the earlier three quarters of the year. The decline in Q4 net profit was a consequence of a sharp reduction in tuna prices during the quarter to USD1,173 per metric ton on average from the earlier rate of USD1,900 per metric ton. Due to such tuna price volatility, finished goods previously manufactured at higher raw material price were subject to an allowance of diminution in value of inventory, worth approximately Bt200 million. Other than this allowance, the costs of maintenance and improvement of 4 tuna vessels, at approximately Bt100 million, also suppressed the Q4 net profit.
Mr. Thiraphong gave additional opinion, “2008 is another exceptional year for us because we made remarkable improvements both in sales and net profit over the previous year. This is especially obvious when we look at this year’s net profit, which hits Bt2,200.5 million. The figures actually marked the second highest net profit in our corporate history since 2003, when we achieved the historic new high of Bt2,279 million in net profit. Apart from this, in 2008 we also reached the annual sales target of USD2 billion, a milestone we set 5 years ago. Through in the past 5 years, we continually faced different risk factors, ranging from appreciation of Thai baht, volatile oil and tuna prices, economic downturn both at home and abroad, and the imposition of trade barriers. We managed to weather these factors thanks to our strong business fundamentals and flexibility in our marketing strategy. Eventually, we emerged from these 5 years with our ambitious sales growth target achieved, our market share enlarged, and our operating performance steadily on the rise. We are now set to stride towards USD3 billion annual sales target within 4 years (by 2012). This means that we will have to achieve 12% sales growth per year on average.”
With regards to sales breakdown by product during 2008, tuna products continued to
capture the biggest share at 48%, followed by frozen shrimp (19%), canned pet food (9%), canned seafood (8%), shrimp feed (6%), domestic sales (4%), frozen cephalopod (3%) and canned sardine/mackerel (3%). In comparison with 2007, total sales across all products registered highly promising growth rate of 28.4% while sales volume also rose by 13%. The U.S., EU, and Japan remained the major export markets in 2008 while African and South American markets showed robust annual growth of up to 81% and 65%, respectively.
Mr. Thiraphong also mentioned TUF business direction in 2009, “We remain positive about our business outlook. We anticipate that tuna prices will be moderately volatile this year. Current weak Thai currency is a favorable factor for us. With regards to the persisting global economic recession, we anticipate that our major market in the U.S. may suffer to a certain extent, but the impact would not be significant, given the fact that our products are viewed as basic food items, and sold at affordable prices. To combat the impacts of economic recession, we have been closely monitoring market situations and making necessary adjustments accordingly. We have put efforts to spot and expand into new potential markets like Russia and the Middle East while also maintaining our existing customer base. Japan is another promising market for our tuna products this year because Thailand is poised to carve more market share in Japan through improved import tax benefits under the JTEPA. Also, the strong Yen will contribute positively to our business. China’s problem over food safety standards has encouraged Japan to turn to other food-producing countries for more reliable food products. For us, we will place more weight on value-added products to better serve Japanese consumers.”
Mr Thiraphong concluded, Our financial status continues to remain solid. We have enough working capital to meet our additional investment requirements. In November 2008, we successfully issued a Thai Baht bond worth Bt 2,000 million, with a very positive response from targeted investors. The bond was divided into two tranches (2-year and 5-year). The successful bond issue suggests strong confidence in our business among institutional investors and financial institutions. We believe we are in a strong position to generate continued business growth as well as good returns on investment for shareholders. Our achievement of 2008 annual performance should bode well for this year’s first dividend payment.
For more information please contact:
Putchareeporn Phadpho (Tarn)
Corporate Communication Department
Thai Union Frozen Products PCL.
Tel: +66 2298 0024, 66 2298 0537-41 ext 677
Fax: +66 2298 0024 ext 679