King Oscar canned mackerel. (Photo Credit: King Oscar)

TUF obtains higher sales but profits fall in Q2

Thai Union Frozen Products PCL. (TUF) achieved a good operating result for the second quarter of 2015 driven by a 1.3 per cent growth in sales year on year but its net profit fell 7.2 per cent, hit mainly by foreign exchange losses and higher expenses.

For the second quarter, the firm reported net profits amounting to THB 1,412.3 million (USD 39.9 million), compared to THB 1,521.7 million (USD 43.1 million) in the same period last year.

The firm's sources explained that the consolidated sales increase, to THB 30,642 million (USD 865.2 million) was possible thanks to contributions of recent acquisitions, such as MerAlliance, King Oscar and Orion Seafood.

“[…] The merit of investing in first class European companies as part of our overall global strategy has been clearly demonstrated in the past few quarters by their strong operating performances. These companies show strong resilience and thrive in tough market conditions,” stressed TUF’s President and CEO Thiraphong Chansiri.

Other factors the benefit the firm’s results were the continual strong margins from its own brands, which increased 43 per cent in comparison to 41.3 per cent a year ago, and a slight recovery of EUR against Thai baht

TUF makes the Chicken of the Sea brand and counts Wal-Mart and Costco Wholesale Corp among its buyers.

The company’s gross margin for the analysed period reached 16.9 per cent compared with 13.8 per cent in the first quarter this year and 16.1 per cent for the corresponding period last year.

“In spite of the challenges of currency fluctuations and certain one-time expenses, the operating performance of the company had been satisfactory,” Chansiri pointed out.

The firm’s management also informed that during the first six months of the year, cumulative net profit reached THB 2,919 million USD 84.2 million), representing an 18.1 per cent growth from the same period last year.

As of the first half of this year, the company’s main market destinations were the US (42 per cent), Europe (31 per cent), Japan (6 per cent) and other countries (13 per cent) while the domestic market accounted for 8 per cent of sales.

The main exported products were tuna (40 per cent), shrimp (27 per cent), salmon (8 per cent), pet food (7 per cent), sardine/mackerel (6 per cent), and value-added and other products (12 per cent).

In reference to the future outlook, the firm’s CEO explained that the focus will remain on achieving organic growth through their core product categories and improved efficiency in their operations across the globe.

“Our international footprint will continue to expand and we remain committed to achieving our revenue target of USD 5 billion this year,” he added.

Related articles:

- TUF postpones public share offering
- TUF expects to raise USD 380 million to finance Bumble Bee purchase
- TUF plans to settle Bumble Bee purchase and discards new acquisitions

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