Sao Ta Foods recently unveiled its projections for the fiscal year 2024, outlining ambitious targets despite anticipated challenges in the shrimp industry. The company is gearing up for its Annual General Meeting of Shareholders scheduled for April 19, where it will delve into its strategic initiatives and financial outlook.

Navigating Industry Challenges

Sao Ta’s leadership anticipates several hurdles for the shrimp industry in 2024, with particular concern surrounding the ongoing anti-subsidy and anti-dumping lawsuit in the United States, posing a threat to Vietnamese shrimp businesses. In response, Sao Ta is proactively preparing comprehensive documentation to address any inquiries from the US Department of Commerce (DOC) and applying for mandatory defendant status in the lawsuit. Additionally, the company is focusing on enhancing safety protocols and welcoming inspections by the US FDA to ensure compliance and bolster its reputation.

The maritime security situation looms as another factor influencing Sao Ta’s operations, potentially disrupting ship freight and sales prices. Ongoing geopolitical tensions and the risk of inflation resurgence further compound challenges for the industry. Moreover, unfavorable exchange rates, particularly concerning the Yen, may impede exports to the Japanese market.

Domestic Supply Concerns

Internally, Sao Ta faces constraints on shrimp raw materials due to limited farming activities stemming from low profitability and high operational costs. With farmers facing challenges and low success rates in shrimp farming, the company confronts reduced access to essential resources for its operations.

Despite these obstacles, Sao Ta remains resolute in its vision and targets for 2024. The company aims to achieve processed shrimp output of 22,300 tons, processed agricultural product output of 1,500 tons, and general consumption sales totaling USD 210 million. Moreover, Sao Ta is eyeing a consolidated pre-tax profit of USD 12.8 million, marking a 5% increase over 2023 figures. An expected dividend payout of at least 20% underscores the company’s commitment to shareholder returns.

Performance Overview and Insights

Reflecting on its recent performance, Sao Ta reported a mixed bag for February 2024. While finished shrimp production stood at 931 tons, representing a marginal increase over the previous year, consumption dipped by 9%. Similarly, agricultural product production witnessed a significant decline of 69%, with consumption also experiencing a downturn of 21%.

February sales amounted to USD 11.3 million, reflecting an 84% comparison to the same period in 2023. The company attributed this decline partly to the Lunar New Year holiday, coupled with reduced operational days and a shortage of shrimp raw materials.