International food and beverage manufacturing company Thai Union reported positive performance in its ambient and petcare segments in the fourth quarter of 2024, leading to gross profit margin gains and helping the firm close out a strong year overall.
Thai Union released its Q4 results on 17 February, which highlighted that the company achieved net profits of THB 1.2 billion (USD 36 million, EUR 34.3 million) in the quarter.
In the same period a year prior, the firm reported a net profit loss of THB 17.2 billion (USD 509.9 million, EUR 486.5 million), which was mainly due to a one-time impairment charge the company paid in relation to its exit from the struggling U.S. restaurant chain Red Lobster.
Thai Union first invested into Red Lobster in 2016 and then was part of a consortium that acquired it outright in 2020. After Red Lobster posted years of consecutive losses, the company announced in January 2024 it would divest from its minority share in Red Lobster and take a one-time, non-cash impairment charge of THB 18.5 billion (USD 548.8 million, EUR 523.5 million) that would go on its Q4 2023 financial report.
Excluding the impairment charge and any other contributions linked to Red Lobster, the firm actually posted an adjusted net profit of THB 1.5 billion (USD 44.3 million, EUR 42.3 million) in Q4 2023.
Though the firm’s Q4 2024 net profit dropped compared to its adjusted net profit in the same three-month span of 2023, the firm’s gross profit in Q4 2024 rose 3.6 percent year over year to THB 6.5 billion (USD 194.5 million, EUR 185.5 million), driven primarily by improved performance within Thai Union’s ambient and petcare segments, along with growth in its feed business.
Thai Union’s gross profit margin (GPM) in the quarter also increased to 18.7 percent, higher than 17.8 percent recorded in Q4 2023, reaching its third-highest quarterly level over the past 14 quarters.
Overall sales in Q4 2024 decreased 1.2 percent year over year to THB 35.1 billion (USD 1 billion, EUR 993 million), mainly due to the appreciation of the Thai baht against other major currencies. Nevertheless, organic sales in the quarter grew 1.9 percent compared to a year earlier, while sales by volume surged 6.7 percent year over year.
Broken down by segment, the GPM of the firm’s ambient business in Q4 hit 20.6 percent, which was up from 17.4 percent in Q4 2023. Thai Union attributed the segment’s growth largely to the rise in global demand and lower material costs in Thai Union’s inventory.
The company’s sales of ambient seafood in Q4 2024 rose 1.7 percent year over year to THB 16 billion (USD 473.7 million, EUR 451.6 million), which the firm said was largely driven by improved performance in the Middle East and the U.S.
GPM within the petcare segment also surged in Q4 2024 to 26.1 percent from the 23.4 percent it achieved in Q4 2023, largely thanks to higher share of premium products. However, GPM in the segment fell quarter over quarter from the 30.6 percent achieved in Q3 2024, mainly due to a rise in overhead and raw material costs, according to Thai Union.
Thai Union’s petcare sales by value between October and December of last year realized a marginal increase of 0.1 percent year over year to THB 4.6 billion (USD 137.2 million, EUR 130.9 million), as most customers had fully restocked in Q4 2023, according to the firm, while sales by volume in Q4 2024 dropped 3.1 percent year over year as a result of port congestion.
While ambient and petcare had a strong quarter, Thai Union’s sales of value-added products in Q4 2024 contracted by 4.3 percent year over year to THB 2.6 billion (USD 76.4 million, EUR 72.8 million), largely due to lower consumption in the U.S. for value-added products and lower sales prices across most segments.
Thai Union’s frozen sales in the quarter also declined 4.7 percent year over year to THB 11.9 billion (USD 354.1 million, EUR 337.6 million), mainly attributable to the same factors that hurt the value-added sector. Sales by volume in the category, though, increased 7.6 percent from Q4 of 2023 due to the rise in sales volumes of the feed sub-category within the frozen business.
"Thai Union’s ambient, petcare, and value-added businesses demonstrated remarkable resilience in the face of weak global economic growth and more cautious spending among consumers around the world,” Thai Union CEO Thiraphong Chansiri said. “As we continue to execute our Strategy 2030, I am optimistic that Thai Union will be positioned for long-term, sustainable growth as we pursue an ambitious goal of boosting net sales to USD 7 billion [EUR 6.7 billion] and doubling EBITDA by 2030.”
For the full year, Thai Union’s EBITDA in 2024 amounted to THB 13.3 billion (USD 396.5 million, EUR 378.3 million), rising 8.6 percent from 2023.
Its net profit in 2024 stood just under THB 5 billion (USD 147.9 million, EUR 141.1 million), up 7.2 percent from the adjusted net profit in 2023, while its GPM achieved an all-time high of 18.5 percent in 2024, up from 17.1 percent in 2023.
Thai Union said it aims for sales growth of between 3 and 4 percent in 2025, which is supported by the organic expansion of its businesses, but it recognizes that the anticipated appreciation of the baht against other currencies, as well as geopolitical tensions, the likely impact of changes in U.S. trade policies, and continued stagnant economic growth, could affect this sales target.
