Sao Ta Foods revealed a decline in finished shrimp output and consumption for February 2024, marking a decrease of 8% and 9% respectively compared to the same period in 2023. Additionally, the company reported a 21% decrease in the consumption of finished agricultural products, totaling 87 tons.

Revenue Decline in February 2024

The total consolidated revenue for Sao Ta Foods in February 2024 amounted to USD 11.3 million, showcasing a 16% decrease compared to February 2023. The Board of Directors attributed this decline to various factors including the shortened operational period due to the Lunar New Year holiday, which resulted in the company operating only 21 days. Furthermore, the scarcity of shrimp raw materials due to the season’s end and limited orders also contributed to the decrease in revenue.

Despite the decline in February, Sao Ta Foods managed to achieve an accumulated revenue of USD 30.5 million in the first two months of 2024, representing a 6% increase over the same period last year.

Projections for the First Quarter of 2024

Rong Viet Securities (VDSC) predicts that Sao Ta Foods’ average export shrimp price may still be 10% lower in the first quarter of 2024 compared to 2023 due to market uncertainties. However, they anticipate that the company’s revenue for the quarter will remain on par with 2023, thanks to a projected 10% increase in output.

VDSC forecasts a positive outlook for Sao Ta Foods in 2024, expecting a 10% increase in revenue and a substantial 25.5% rise in profit compared to 2023. This optimistic projection is supported by an estimated gross profit margin of 11%, significantly improved from the previous year, as Sao Ta Foods anticipates a 29% increase in self-raised shrimp output.

Expansion and Market Resilience

Sao Ta Foods has been strategically expanding its operations to enhance its raw material autonomy. With the operation of the Vinfarm farm in Vinh Thuan since July 2023, the company has expanded its farming area to 525 hectares, bolstering its raw material sourcing capabilities. Additionally, Sao Ta Foods currently operates three factories with a processing capacity of 45,000 tons per year.

Despite global shipping challenges, Sao Ta Foods is expected to be minimally affected, primarily exporting to the Japanese market and the UK market at FOB prices, thereby avoiding direct shipping costs.

Positive Market Recovery Prospects

Industry experts anticipate a positive recovery in Vietnam’s shrimp export activities throughout 2024, particularly in key markets such as the US, EU, and Japan. This recovery is expected to create favorable conditions for growth within the shrimp processing and exporting sector.