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UPDATE 1-Thai Union Frozen Q1 net profit jumps 59 pct, shares up
May 15, 2015 / 8:58 AM / 2 years ago

UPDATE 1-Thai Union Frozen Q1 net profit jumps 59 pct, shares up

* Q1 net profit 1.5 bln baht vs 790 mln forecast

* Forex gain of 1.12 bln baht, sales up 2.4 pct

* Maintains 2015 revenue target of $5 bln (Adds company sales target, shares)

BANGKOK, May 15 (Reuters) - Thai Union Frozen Products Pcl , the world’s largest canned tuna maker, reported a better-than-expected 59 percent rise in first-quarter net profit due mainly to foreign exchange gains and lower finance costs, sending its shares up 3 percent.

Thai Union, which makes the “Chicken of the Sea” brand and counts Wal-Mart and Costco Wholesale Corp among buyers, maintained its revenue target of $5 billion for this year, President and CEO Thiraphong Chansiri said in a statement.

Net profit was 1.5 billion baht ($44.6 million) for the January-March quarter, nearly twice the average forecast of 790 million baht by five analysts surveyed by Reuters.

It made a foreign exchange gain of 1.12 billion baht versus a 254 million baht gain a year earlier.

Sales rose 2.4 percent from a year earlier, helped by the consolidation of three seafood companies the group acquired, Thai Union said.

Sales were under pressure from lower tuna and shrimp raw material prices, which led to fierce competition in the U.S. canned tuna market and delayed orders of some customers.

The U.S. market is the company’s biggest, and contributed 43 percent of sales in the first quarter. The European Union accounted for 28 percent sales, while the domestic market brought in 9 percent, the statement said.

Last December, the company stepped up an aggressive international expansion drive by agreeing to buy U.S. competitor Bumble Bee Seafoods for $1.5 billion, its biggest acquisition, as it wants to boost revenue through overseas asset purchases.

Thai Union, which is raising $400 million through an equity issue to help finance the acquisition, is waiting for approval from U.S. authorities and expects the deal to close in the second half of this year.

Analysts say the company should get approval given that Bumble Bee and “Chicken of the Sea” have different market positions. Bumble Bee focuses on premium products in a niche market, while Chicken of the Sea offers products to a mass market.

Thai Union shares, valued at $2.9 billion, were up 2.9 percent at 21.10 baht at 0810 GMT, while the overall Thai index was 0.01 percent lower. ($1 = 33.6000 baht) (Reporting by Khettiya Jittapong; Editing by Muralikumar Anantharaman and Prateek Chatterjee)

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