Vietnam’s largest shrimp producer, Minh Phu, seeks to reduce the target of profit-before-tax it plans to achieve this year due to higher-than-expected material prices, Minh Phu Chairman and CEO Le Van Quang told SeafoodSource on Thursday, 27 June.
Minh Phu said in a document prepared ahead of the company’s stakeholders’ general meeting on 29 June that it now hopes to gain profit of VND 1.43 trillion (USD 61.5 million, EUR 54 million) in 2019, down from the target of VND 2.3 trillion (USD 98.8 million, EUR 86.9 million) it set earlier this year.
The prolonged hot weather conditions in southern Vietnam in the first months of 2019 have led to shortage of shrimp material for Minh Phu, pushing purchasing prices to increase. And while export prices did not see any significant change in the first months, the company’s profit went down, Quang said.
In the first quarter of this year, Minh Phu achieved sales value of VND 3.4 trillion (USD 145.9 million, EUR 128.3 million), rising 10.1 percent year-on-year. Its earnings in the period, however, fell 30.3 percent to VND 89.07 billion (USD 3.8 million, EUR 3.4 million), the company’s data showed.
Minh Phu exported 19,954 tons of shrimp from January through May, up 2.3 percent year-on year, gaining sales value of USD 225 million (EUR 197.9 million), down 0.4 percent.
Minh Phu will export 77,400 tons of shrimp and aims to get USD 850 million (EUR 747.6 million) of sales this year.
The company hopes profit will be positive from May to the year-end, as beginning in May, the purchase prices of shrimp material have decreased due to increased supply, Quang said.
The global shrimp price is expected to increase by 10 percent from June to October. As shrimp farmers in India have reduced farming due to low prices, processing plants in India have faced shortage of material supply, causing prices of commercial shrimp there to rise, Minh Phu said on 15 June.
