SET-listed Thai Union Frozen Products Plc (TUF) has slashed this year's capital expenditure and its revenue forecast as its key shrimp business faces challenges in the second half.
The world's largest tuna company has downgraded its revenue projection from US$4 billion to $3.8 billion after disappointing second-quarter results.
Planned capital expenditure was also cut from 6 billion baht to 4-4.5 billion as an expansion of shrimp capacity has now been stalled, said deputy general manager Wai Yat Paco Lee.
The company has decided to allocate partial shrimp production to the underused Samut Sakhon factory of Pakfood Plc, of which TUF owns 75%.
A new shrimp factory was planned to be completed by mid-2014 to replace the old one that was damaged by fire last year, Mr Lee told a briefing at the Stock Exchange of Thailand yesterday.
"We have suspended the shrimp capacity expansion for now and will look at the plan again early next year. If early mortality syndrome (EMS) has eased by then, we might decide to proceed with the expansion," he said.
EMS, which became evident in Thailand in the latter half of last year after the epidemic hit China, Vietnam and Malaysia, has largely destroyed shrimp supply and caused the price of shrimp materials to skyrocket.
This year, supply is projected to drop to 250,000 tonnes from 480,000 to 500,000 tonnes.
"Since the third quarter of 2012, the shrimp business has been tough due to an inadequate supply of raw materials. This year, the situation has remained challenging because the disease has yet to be tackled and we expect EMS will remain with us until next year," Mr Lee said.
For the first six months, TUF's sales grew 5% year-on-year to copy.76 billion but were relatively unchanged in baht terms at 52.56 billion as net profit plunged to 1.03 billion baht from 2.47 billion.
Frozen shrimp accounted for 19% of TUF's turnover in the first half, with another 3% coming from shrimp feed.
Tuna, which dominated half of its business, has stabilised in price and is expected to perform better in the second half with less volatile prices.
About 80% of TUF's revenue is in dollars, while costs are split equally between baht and dollars.
Shares of TUF closed yesterday on the SET at 51.75 baht, down 1.50 baht, in trade worth 106 million baht.
The world's largest tuna company has downgraded its revenue projection from US$4 billion to $3.8 billion after disappointing second-quarter results.
Planned capital expenditure was also cut from 6 billion baht to 4-4.5 billion as an expansion of shrimp capacity has now been stalled, said deputy general manager Wai Yat Paco Lee.
The company has decided to allocate partial shrimp production to the underused Samut Sakhon factory of Pakfood Plc, of which TUF owns 75%.
A new shrimp factory was planned to be completed by mid-2014 to replace the old one that was damaged by fire last year, Mr Lee told a briefing at the Stock Exchange of Thailand yesterday.
"We have suspended the shrimp capacity expansion for now and will look at the plan again early next year. If early mortality syndrome (EMS) has eased by then, we might decide to proceed with the expansion," he said.
EMS, which became evident in Thailand in the latter half of last year after the epidemic hit China, Vietnam and Malaysia, has largely destroyed shrimp supply and caused the price of shrimp materials to skyrocket.
This year, supply is projected to drop to 250,000 tonnes from 480,000 to 500,000 tonnes.
"Since the third quarter of 2012, the shrimp business has been tough due to an inadequate supply of raw materials. This year, the situation has remained challenging because the disease has yet to be tackled and we expect EMS will remain with us until next year," Mr Lee said.
For the first six months, TUF's sales grew 5% year-on-year to copy.76 billion but were relatively unchanged in baht terms at 52.56 billion as net profit plunged to 1.03 billion baht from 2.47 billion.
Frozen shrimp accounted for 19% of TUF's turnover in the first half, with another 3% coming from shrimp feed.
Tuna, which dominated half of its business, has stabilised in price and is expected to perform better in the second half with less volatile prices.
About 80% of TUF's revenue is in dollars, while costs are split equally between baht and dollars.
Shares of TUF closed yesterday on the SET at 51.75 baht, down 1.50 baht, in trade worth 106 million baht.
