Thai Union targets 5% growth for 2018

Thai Union targets 5% growth for 2018

A TU food scientist works in Pathum Thani province. Last year's low tuna prices helped the seafood giant cross the $4-billion revenue threshold. JIRAPORN KUHAKAN
A TU food scientist works in Pathum Thani province. Last year's low tuna prices helped the seafood giant cross the $4-billion revenue threshold. JIRAPORN KUHAKAN

SET-listed Thai Union Group Plc (TU), the world's biggest canned and frozen tuna exporter, targets sales growth of 5% this year, driven by organic growth from the company's global business operations.

The target would be the highest gain in nine years. The company plans to keep its gross profit margin at 15% and sales and administration expenses below 10%, said TU investor relations manager Bunlung Waiyanont.

The company reported total sales of 137 billion baht in 2017, setting a record for an eighth consecutive year. Sales growth expanded by 1.6% in baht terms, or 3.9% if foreign exchange costs are excluded.

The company reported gross profit of 18.4 billion baht last year, down by 9% as tuna prices rose by 30% compared with a year earlier.

The company was able to control its operating costs and boosted net profit by 14.6% year-on-year to 6.02 billion baht.

"This is the first time in our company's history that US dollar revenue broke the US$4 billion [125 billion baht] threshold at $4.03 billion. We target sales growth of 5% for this year, driven by organic growth for many of our global businesses," said Mr Bunlung.

The capital expense budget is 4.8 billion baht, in line with last year, which includes a normal investment budget and a budget to revamp the company's European plants, he said.

Mr Bunlung said a decline in tuna prices seen in last year's fourth quarter helped profits remain resilient. Tuna prices have declined to $1,550 per tonne, down from $2,300 in October, encouraging consumer demand, he said.

The US and Canada remain major markets, contributing to 40% of total revenue, driven by the Chicken of the Sea brand and Red Lobster, the largest global seafood restaurant, said Mr Bunlung.

The company aims to see greater growth in Europe, which contributed 32% of total revenue in 2017, by launching more value-added products, he said.

The company also wants to keep its net debt-to-equity ratio lower than two times. The ratio stands at 1.38 times and 77% of total debt is classified as long-term debt.

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