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Thai Union Group Earnings Soar in Q1

THAILAND - Thai Union Group announced its 2012's first-quarter results with net profit recorded at Baht 1,467 million, equivalent to a 95 per cent year-on-year growth. Sales growth was 11 per cent.

Despite the fire incident at one of its shrimp processing plants early in the year, the Company managed to deliver robust quarterly performance, reflecting its strengths and solid business position of global brand leadership in the seafood industry.

Thiraphong Chansiri, president of Thai Union Frozen Products PCL. (TUF), revealed that, for the first quarter of 2012, the Company enjoyed a robust growth in net profit by as much as 95 per cent to Baht 1,467 million, compared to its 2011 counterpart of Baht 760 million. Earnings per share for the quarter were Baht 1.53, up 94 per cent from the corresponding period last year. Quarterly sales in US dollar term were USD 822 million, up 11 per cent from a year ago. In line with sales in US currency, sales in Thai baht term also grew equally by 11 per cent from Baht 22,706 million in 2011 to Baht 25,304 million in the quarter. Total revenues for the quarter amounted to Baht 25,678 million, up 12 per cent from the first quarter of 2011.

According to further explanation given by Khun Thiraphong, the overall performance for the quarter was close to sales growth target. Normally, the first quarter is typically the slowest quarter of the year. This year, however, the Company could generate excellent sales and net profit during the first quarter, almost the same as those figures reported in last year's strongest quarter (Q3/2011; sales were USD 831 million with net profit of Baht 1,561 million).

Strong sales growth was seen across all product lines during the quarter while the gross profit margin rose to 17.2 per cent, which was higher than 14.8 per cent achieved in the first quarter a year ago. During the quarter, a fire incident took place at one of its Thai shrimp-processing plants in Samut Sakhon province. The firm consequently relocated its shrimp plant workers to its other shrimp-processing facility in Songkhla province. The fire did negatively affect the firm's first-quarter performance to some extent, but not considerably. In consideration of the overall performance for the quarter, the Company is confident that further profitable growth is well on track. The Company remains ready for achieving its USD 5,000-million annual sales target within 2015.

With regards to the fire incident, shrimp production has now been resumed to a normal level. The Company only suffered an insignificant financial impact as the damaged plant facilities and goods are fully covered by its insurance policy. The insurance policy also provides full compensation to the Company for any potential business interruption.

For this quarter, tuna products make up the largest share in the Company's product portfolio at 50 per cent, followed by frozen shrimp (16 per cent), canned pet food (7 per cent), products for domestic market (8 per cent), canned seafood (5 per cent), frozen salmon (5 per cent), shrimp feeds (4 per cent), canned sardines and mackerel (5 per cent) and frozen cephalopod (1 per cent). Main export markets include the US (36 per cent), European Union (30 per cent), Japan (9 per cent), domestic market accounts (10 per cent), Africa (4 per cent), Oceania (4 per cent), the Middle East (3 per cent), other Asia (3 per cent), Canada (1 per cent) and South America (1 per cent) of total sales.

In 2012, the Company will implement more aggressive marketing strategies for its domestic market. Branding initiatives will cover both corporate brand and product brand to enhance stronger recognition among Thai consumers. In the past, the Company's strategies did not focus strongly on the domestic market because over 90 per cent of its revenues were typically generated from overseas markets. However, branding will become an important business initiative for the Company from now on.

To begin with, the Company's logo has been changed to convey an more international image to the public. The first commercial advertisement, depicting the fact that the firm is the true owner of a host of well-recognised global tuna brands, has been produced and aired on local TV channels in order to make TUF a more familiar name to Thai consumers. In addition, more public relations and advertising activities will be implemented all year round via mass media.

Lucy Towers

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