TUF‘s Q4/2009 Profit Grew 134% with 3.3 Billion Baht in Annual Profits

March 4, 2010 16:22

TUF announced its annual performance figures for the year 2009 with the 4th quarter net profit rising 134% compared to the same period of 2008. Net profit for the entire year broke all of the company's existing records with 3,344 million baht, or a 52% increase from the previous yearб reports www.megafishnet.com with reference to Thai Union Group.

Thai Union Frozen Products Public Company Limited President Thiraphong Chansiri revealed that the leading manufacturer and exporter of frozen and canned seafood had achieved outstanding results for 2009, with net profit reaching 3,344 million baht, an increase of 52% compared to the same period last year, which saw net profit of 2,201 million baht. Earnings per share was 3.79 baht per share, 51% higher than the previous year. Sales in dollar term dropped 3% to 2,014 million USD, against the previous year's figure of 2,070 million USD. In Thai baht term, 2009 sales reached 68,995 million baht, comparable to 69,048 million for 2008. Total revenues for the year amounted to 69,697 million baht, compared with the previous year with 69,519 million baht.

Quarterly results for the last quarter of 2009 showed strong performance with net profit growth of 134%, a dramatic surge from 307 million baht in Q4/2008 to 718 million in Q4/2009. Sales in dollar term amounted to 519 million USD, representing a small drop of 2% from the same period of 2008, which was 528 million USD, while sales in Thai baht term was equal to 17,281 million baht, a 6% drop from Q4/2008 when the figure reached 18,455 million baht.

Mr Thiraphong stated that the company is extremely pleased with the 2009 results. TUF was able to maintain satisfying rate of net profit growth and achieve a net profit of 3,344 million baht, the highest ever in the company's history on the back of effective management and cost control measures, coupled with outstanding operating results in overseas subsidiaries. All of the group companies were able to exceed their profit goals even as they undergo significant structural changes, such as the closure of the American Samoa plant, the commissioning of the new manufacturing facility in Georgia, USA, and the merger of the management teams at two US subsidiaries, Tri-Union Frozen Foods and Empress International. The company paid a total sum of 17 million USD, or 568 million baht, for the closure of the American Samoa plant and opening up of the Georgia plant. If this one-time expenditure was added back, the company's net profit would be even higher.

Tuna products retained the largest share in TUF's product portfolio in 2009, at 44% of all exports. Frozen shrimp came in second at 20%, followed by canned cat food (9%), canned seafood (9%), shrimp feed (6%), products for the domestic market (5%) , canned sardine and mackerel (4%), and frozen cephalopod (3%). The US remained the number one market with 49% share, followed by the European Union at 13%, Japan (12%), domestic sales (11%), African nations (6%), Oceania (3%), the middle-east (2%), the rest of Asia (2%), and Canada and South America at 1% each.

Besides managerial capabilities and effective cost control, adept marketing strategies was another key factor contributing to the company's great success in gaining a larger profit margin. This was particularly true for shrimp products, while canned sardine, frozen cephalopod and salmon, shrimp feed, and canned seafood also experience strong sales growth of 40%, 11%, 8%, and 3% respectively. These results are based on TUF's ability to develop products that match continually evolving market preference. The company foresees sustained growth in demand for seafood products both in established and emerging markets.

Mr Thiraphong commented that the global economic outlook in 2010 is more promising than 2009, but TUF will continue to operate its businesses with caution and follow new developments closely with a view to seize appropriate opportunities for business expansion. Risk factors to watch include the value of the baht, which the company has addressed very effectively in the past, and the fluctuation of raw material prices. With operations covering tuna fishing fleet, TUF has access to real-time information about the trend of raw material prices and availability, allowing business decisions and strategies to be adapted quickly in response to changing situations and limiting the risk from uncertainties concerning raw materials. The complete integration of information in the company's business operations has helped increase competitiveness in the increasingly volatile and interconnected market by enabling up-to-date and effective decision making.

In its marketing strategy, TUF will shift more focus on product diversity, particularly value-added products. The company has set up a Culinary Development Division headed by a food expert from the US. This new team will act as the company's focal point for new product development. The company is also building a new cold storage facility with capacity of 40,000 tons under the 2-year 2-billion baht business expansion plan, which also include the expansion of tuna, frozen shrimp, and canned sardine production lines. In addition, the reorganization of management structure at two US subsidiaries, which started in mid-2009 and is expected to finish in 2010, will help strengthen the implementation of the company's

US market strategies. As a result of this merger, the new management team will oversee an operation which ranks as the second largest frozen seafood importer in the US. TUF is convinced that these developments will provide the momentum for the company to grow sustainably and give it the capability to seize the opportunity to expand in the future.

Mr Thiraphong concluded that, based on the outstanding net profit results, the Board of Directors has agreed to propose to the 2010 general meeting of the shareholders that a dividend of 1.00 baht per share be paid out. This amount is divided into a tax free portion of 0.70 baht, due to the Board of Investment's tax privilege, and a taxable portion of 0.30 baht.

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