The prevailing global economic and political uncertainties in key markets have forced SET-listed Thai Union Group Plc (TU), the world's biggest maker of canned tuna products, to lower its earlier 15% sales growth target for the year to single digits.
The company's chief executive, Thiraphong Chansiri, said Asia, especially China and Southeast Asia, seems to be the stablest region and the area that TU views as offering the biggest growth opportunities for the business.
In April, the company said it expected sales to grow 15% this year to 150.8-154.1 billion baht, up from 130 billion in 2016, basing the forecast on expansion of existing tuna and seafood businesses and innovations leading to new higher-value products.
TU plans to invest conservatively in new projects this year, setting aside just 25 billion baht after splashing out on overseas acquisitions over the past few years.
Mr Thiraphong is uncertain if the company can keep its gross profit margin at the 15-16% it enjoyed in the past several years, as tuna and shrimp prices have gone up considerably.
TU reported sales revenue of 31.4 billion baht in the first quarter, up 0.7% from the same period last year, with a net profit of 1.5 billion baht, up 19.3% year-on-year, with US-based Red Lobster and foreign exchange gains being the main contributing factors.
But gross profit declined by 13.3% from a year earlier to 4.3 billion, while gross profit margin also fell to 13.8% compared with 16% in the prior-year period, Mr Thiraphong said.
Sales contribution from TU's frozen and chilled seafood business rose to 12.9 billion baht, up 5.6% on the same period last year, despite lower demand from Europe.
In addition, pet care and value-added product sales grew 17.4% year-on-year to 4.4 billion baht, mainly because of new products and improved market penetration.
The sales contributions from TU's own brands remained stable at 42% in the first quarter, with the balance coming from the company's private labels and food services.
The US remained the largest market with 40.3% of total sales in the first quarter of the year, followed by Europe (31%), the domestic market (8.1%) and Japan (6.4%). Other markets combined for 14.2%.
Last year, TU reported a 7.3% rise in consolidated sales to 134 billion baht with a net profit of 5.25 billion baht.