First half sales, profit up for Thai Union despite market challenges
Thai Union Group (TU) achieved net profit of THB 2.9 billion (USD 87 million, EUR 73.8 million) for the first-half of this year, an increase of 4.4 percent year-on-year, with total sales up 1 percent to THB 66.2 billion (USD 2 billion, EUR 1.7 billion). However, higher raw material prices and European currency depreciations saw the company’s net profit in the second-quarter fall 7.6 percent year-on-year to THB 1.4 billion (USD 42 million, EUR 35.6 million).
Sales contributions from TU’s own brands remained stable at 43 percent in the first-half, with the balance coming from the company’s private label and food services sales. The United States remained the company’s largest market with 38 percent of total sales in the first six months, followed by Europe with 33 percent, the Thai domestic market at 8 percent, Japan at 6 percent and other markets at 15 percent.
Among its main businesses, second-quarter sales for PetCare and value-added products grew the most at 12.9 percent year-on-year to THB 4.5 billion (USD 135.1 million, EUR 114.5 million), with the increase mainly due to new product launches and improved market penetration.
The frozen and chilled seafood business expanded 6 percent year-on-year with sales at THB 13.9 billion (USD 417.2 million, EUR 353.5 million), while sales from the ambient business fell 2.8 percent from the same period of last year to THB 16.4 billion (USD 492.3 million, EUR 417.2 million), with the company citing sluggish demand and currency depreciations in Europe, coupled with rising tuna prices.
Despite the operational seasonality, the Red Lobster business in the States that TU acquired in 2016 remained strong and contributed THB 235 million (USD 7.1 million, EUR 6 million) to the net profit in the second-quarter of this year, mainly from tax savings and interest yields.
“We’re satisfied with our operational resilience despite facing persistent challenges in higher raw material costs and variable economic conditions in many markets,” said Thiraphong Chansiri, CEO of Thai Union.
“Our strategic investment in Red Lobster and effort in cost control continue to deliver positive results,” he said.
Last year, TU achieved net profit of THB 5.3 billion (USD 159.1 million, EUR 134.8 million), down from 2015’s THB 6.1 billion (USD 183.1 million; EUR 155.2 million), but consolidated sales increased by 7.3 percent to a record THB 134.4 billion (USD 4 billion, EUR 3.4 billion).