Thai Union Group posted a 0.4 percent year-on-year sales increase in the third quarter of this year to achieve a record for the period of THB 35.2 billion (USD 1.1 billion, EUR 917.6 million), despite significant currency fluctuations and “sharply higher” raw material costs.
The company’s consolidated net profit was THB 1.7 billion (USD 51.3 million, EUR 44.3 million), representing a year-on-year rise of 8.9 percent. Its Q3 gross profit declined 5.6 percent from the corresponding period of 2016 to almost THB 4.7 billion (USD 141.7 million, EUR 122.5 million).
Thai Union (TU) said that near record-high tuna prices, along with continued European currency depreciations and a stronger Thai baht, contributed to a weaker gross profit margin of 13.2 percent, compared with 14.1 percent in Q3 2016.
Among TU’s three major businesses, PetCare and value-added Q3 2017 product sales grew the most, at 2.9 percent year-on-year, to almost THB 4.6 billion (USD 138.7 million, EUR 119.9 million). Its ambient business sales rose 2.4 percent from the same period of last year to THB 15.8 billion (USD 476.5 million, EUR 411.8 million) on the rising tuna prices, while sales from the frozen and chilled seafood business fell 2.4 percent year-on-year to THB 14.8 billion (USD 446.4 million, EUR 385.7 million).
During the first nine months of 2017, net profit grew 6.1 percent year-on-year to THB 4.6 billion, while total sales rose 0.8 percent to THB 101.4 billion (USD 3.1 billion, EUR 2.6 billion) from the same period last year.
Sales contributions from the company’s own brands remained stable at 43 percent in the first nine months, with the balance coming from its private label and foodservices sales. The United States remained TU’s largest market with 38 percent of total saless, followed by Europe (32 percent), the Thai domestic market (10 percent), Japan (six percent) and other markets (14 percent).
Amid operational seasonality, the Red Lobster business in the U.S. remained strong and contributed THB 380 million (USD 11.5 million, EUR 9.9 million) to third-quarter net profit, mainly from tax savings and interest yields.
“Our strategy in geographic and product diversity is helping us weather today’s market and industry’s volatility. We will continue to focus on diversification for our long-term growth,” Thai Union Group CEO Thiraphong Chansiri said. “Continuous improvements, review of costs and streamlining of our operations has helped us during this time of margin pressure.”
In 2016, TU achieved net profit of THB 5.3 billion (USD 159.8 million, EUR 138.1 million), which was down from 2015’s THB 6.1 billion (USD 184 million; EUR 159 million), but consolidated sales increased by 7.3 percent to a record THB 134.4 billion (USD 4.1 billion, EUR 3.5 billion).
