Record sales posted by Thai Union for eighth year in a row despite high tuna prices
Thai Union Group PCL (TU) achieved a record net profit of more than THB 6 billion (USD 190.4 million, EUR 154.1 million) for the full year 2017, up 14.6 percent compared to the previous year, in spite of market volatility and rising prices for raw materials.
TU also reported a 1.6 percent increase in consolidated sales last year, amounting to THB 136.5 billion (USD 4.3 billion, EUR 3.5 billion), making 2017 the eighth year in a row that the company achieved record sales.
The 40-year-old company’s gross profit was THB 18.1 billion (USD 574.3 million, EUR 465 million), with a gross profit margin of 13.3 percent, compared to 14.8 percent for 2016.
High tuna prices contributed to the weaker margin, highlighted TU, but this was partly offset by prudent foreign exchange management and stringent cost controls.
It said that for 2017, sales in the United States continued to play an important role in the company’s revenue, accounting for 40 percent of total sales, while Europe contributed 32 percent. Thailand’s domestic market grew to 10 percent of total sales, while Japan contributed 6 percent.
The sales contribution from major markets marginally shifted in favor of domestic and emerging markets – partly due to strong penetration efforts in emerging markets, particularly China.
“Despite market volatility and higher raw material prices, our profitability remained resilient in 2017,” said Thiraphong Chansiri, CEO of Thai Union. “Raw material price pressures are relaxing as tuna prices started to decline since the fourth-quarter of 2017.”
The 2017 sales contribution from Thai Union brands rose slightly to 42 percent, with the balance coming from private label sales. Ambient sales were stable at THB 61.1 billion (USD 1.9 billion, EUR 1.6 billion).
Sales for the frozen and chilled seafood business climbed 2.7 percent to THB 57.3 billion (USD 1.8 billion, EUR 1.5 billion), while PetCare and value-added sales increased 3.5 percent to almost THB 18.1 billion (USD 574.3 million, EUR 464.8 million).
The increase in company sales value was driven by continued organic growth and increased contribution from the Red Lobster restaurant chain in the United States.