Thai Union Group (TU) achieved net profit (before one time expenses) of THB 5.3 billion (USD 151.2 million, EUR 143.5 million) for the full year 2016, down from the THB 6.1 billion (USD 174.1 million; EUR 165.2 million) posted for 2015, citing high raw material costs, particularly salmon and tuna, for the weaker margins.
Despite the fall in net profit, TU reported a 7.3 percent increase in consolidated sales last year, amounting to THB 134.4 billion (USD 3.8 billion, EUR 3.6 billion). This was the seventh year in a row that the company achieved record sales.
TU said that for 2016, sales in the United States continued to play an important role in the company’s revenue, accounting for 39 percent of total sales. Thailand’s domestic market accounted for 8 percent of total sales, while Europe contributed 33 percent of sales, widening from 29 percent in 2015. Japan contributed 6 percent of total sales.
“Thai Union’s 2016 results show that demand for our products remains strong. Despite challenging costs for raw materials and economic volatility in various markets around the world, we delivered a stable bottom line,” said Thiraphong Chansiri, CEO of Thai Union Group.
The 2016 sales contribution from TU’s brands remained stable at 42 percent, with the balance coming from the company’s private label sales.
Company-wide sales grew across its three major segments in 2016: ambient sales came in at THB 61 billion (USD 1.7 billion, EUR 1.6 billion), up 3.2 percent rise over 2015; sales for its frozen and chilled seafood business increased 11 percent to THB 55.8 billion (USD 1.6 billion, EUR 1.5 billion); and PetCare and value-added sales rose 8 percent to THB 17.5 billion (USD 499.4 million, EUR 473.9 million).
The increase in company sales value was driven by continued organic growth, increased contribution from Rügen Fisch in Germany, consolidation of the Chez Nous acquisition in Canada and improved domestic shrimp exports.
TU also highlighted that in October last year it made a USD 575 million (EUR 545.6 million) investment in Red Lobster, the world’s largest seafood restaurant chain.
The Red Lobster deal was followed in December with the announcement that 100 percent of its branded tuna would come from sustainable sources with a commitment of achieving a minimum of 75 percent by 2020. As part of the new tuna strategy, Thai Union is investing USD 90 million (EUR 85.4 million) in sustainability initiatives, including establishing 11 new fishery improvement projects (FIPs) around the world.
