Hit by rising tuna prices but helped by the strong sales of U.S. subsidiary Chicken of the Sea, the third-quarter net profit of top Asian tuna exporter Thai Union Frozen Products PCL (TUF) could rise as much as 19 percent year on year but dip 22 percent quarter on quarter, they said.
Analysts had expected TUF, which derives 60 percent of its sales from tuna, to benefit from a 78 percent surge in tuna prices to $890 per ton in the third quarter.
But now analysts say TUF could not raise export prices fast enough to keep up with climbing tuna prices.
However, strong U.S. sales of Chicken of the Sea canned tuna -which generates a fifth of TUF's earnings- will keep its third quarter buoyant despite a stronger baht eroding margins as dollar sales translate into fewer baht.
â€The company is still doing things that are adding value and its business in the U.S. is doing quite well,†said Jeff Earhart of Kim Eng Securities, which has a “buy†on TUF.
Chicken of the Sea has an 18 percent share of the U.S. tuna market, while StarKist, owned by San Francisco-based Del Monte Foods Co commands a 40 percent share and privately-owned Bumble Bee Seafoods holds 24 percent, analysts say.
Analysts forecast TUF making, if not surpassing, its 2.4 billion baht 2003 net profit target.
â€Traditionally the fourth quarter has been the best,†said Terapatr Mathanukraw of Seamico Securities.