Seafood giant Thai Union Frozen Products has reported a 9% fall in first-quarter profits despite a rise in sales amid a jump in tuna and shrimp raw-material prices.
The company, which owns the John West brand, booked net profit of THB753m (US$24.8m) for the first quarter of 2011, even as sales climbed 39% to THB22.71bn.
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Thai Union insisted the drop in profit was “insignificant” as it had realised in the fourth quarter of last year that rising commodity costs would persist into the first part of 2011. During the first quarter, tuna prices rose 47% and shrimp prices were up 26%.
The group’s acquisition of John West owner MW Brands in July gave the company the opportunity to increase its sales in Europe.
During the first quarter, a third of Thai Union’s revenues came from Europe, up from 11% a year earlier. The proportion of revenues made up by US sales, which had accounted for 49% of turnover, fell to 37%.
The company noted that the Japanese earthquake and tsunami had led to radioactive material leaking into coastal waters around the country. It also pointed to the floods in southern Thailand during the quarter.
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By GlobalData“Nevertheless, these disasters have not significantly affected the company’s operations, as shown evidently from the quarter’s continued vibrant sales growth. Despite unfavorable and unforeseeable factors, the company remains prepared and confident of overcoming those challenges,” Thai Union said yesterday (11 May).
“Furthermore, the second quarter each year is usually destined as the beginning of the high season. It is therefore expected that more robust performance is coming soon. Having considered this, it is highly likely that the company’s 2011 consolidated annual sales could attain close to US$3bn as planned.”
