Volatile exchange rates hurt TUF

 

Sales in US dollar in the second quarter rose by 9.7 per cent to US$935 million, but sales in baht term rose only 5 per cent to Bt28 billion. 

TUF President Thiraphong Chansiri said “With the challenges of skyrocketing costs, net profit of the business was generally depressed in the second quarter. The company also experienced a loss from foreign exchange hedging, caused by the high fluctuation of Thai baht exchange rate."

In the second quarter, the baht skyrocketed to above 28 per US dollar, before falling below 30 in June.

New financial tools as well new strategies will come into play to achieve the annualised sale growth target of 10 per cent. 

Thiraphong noted that in spite of numerous challenges, the company in the second quarter could achieve a higher gross margin of 12.4 per cent than that in the first quarter. Compared to the first quarter, the second-quarter sales rose by 13 per cent in dollar term and by 15 per cent in baht term.

The overall picture of company exhibited improvement in operating profit due to product repricing and prominent import and distribution circumstances of shrimp business in the US.

In the first half, the company's sales reached $1.76 billion, up by 5 per cent on year, while sales in baht term at Bt52.56 billion were slightly below Bt52.06 billion in the same period last year. The 6-month net profit was Bt1 billion. 

In the period, tuna business generated 50 per cent of the revenue, shrimp and related business (22 per cent), sardine and mackerel business (7 per cent), salmon business (4 per cent), pet food business (7 per cent), value-added products and other business (10 per cent). The US is now the biggest export market, generating 38 per cent of the revenue; followed by Europe (31 per cent), domestic market accounts (8 per cent), Japan (8 per cent), and other countries (16 per cent).

" Despite the strong challenges faced by our business during the first half, we believe that the trend would turn more positive in the second half of the year, resulted from adjustments in management strategies and plans to cope with the situations with focus on our strengths and efficiency optimisation. The Company would emphasize efficient use of its resources and careful investments to achieve profitability. TUF has built strong competitiveness as a seafood producer, from upstream to downstream operations and is able to benefit from diversified sourcing raw materials. After all, we believe that our growth rate in this year would reach 10 per cent, or close to $4 billion," Thiraphong said.

TUF's board approved the interim dividend payment of Bt0.60 a share, payable on September 9.