Thai Union’s Q3 profits down on lower tuna sales

Published on
November 9, 2021
Thai Union reported a decline in its net profit in the third quarter as its tuna sales fell from last year.

Thai Union reported a decline in its net profit in the third quarter as its tuna sales fell from last year, the company said in its Q3 results report, released 8 November.

Thai Union’s net profit in Q3 was THB 1.94 billion (USD 58.7 million, EUR 50.7 million), diving 5.8 percent year-on-year, mainly due to supply chain and workforce disruptions during the pandemic, rising shipping costs, and losses from its subsidiaries.

The company’s sales between July and September rose 2.2 percent to THB 35.54 billion (USD 1.08 billion, EUR 929 million), mainly due to the recovery of its frozen and chilled seafood business and pet care and value-added segment. But its ambient seafood business dropped 8 percent year-on-year, which Thai Union said was “normalized” after last year’s sudden sale increase during the pandemic. Thai Union also attributed its lower sales to rising shipping costs and logistics difficulties caused by an ongoing global container shortage, which resulted in added costs exceeding THB 400 million (USD 12 million, EUR 10 million) for the company in H1 and an additional THB 468 million (USD 14 million, EUR 12 million) in Q3 alone.

“Key markets, including Europe and North America, continued to emerge strongly from COVID-19-enforced lockdowns and restrictions during the quarter. In response, customers cut back on stockpiling shelf-stable products such as canned seafood, resulting in a decline in Thai Union’s ambient seafood business, with sales easing 8 percent year-on-year to THB 15 billion [USD 454 million, EUR 392 million],” Thai Union said.

Thai Union’s ambient seafood category, which includes tuna, sardine, salmon, mackerel, and herring, refers to shelf-stable items that are largely sold through retail channels and sometimes wholesalers. 

In the quarter, Thai Union had to close two of its factories in Thailand for between 10 to 14 days and another plant in Vietnam for more than two months as part of government-mandated COVID-19 outbreak control measures. The company said it expects impact from the disruption will ease in the fourth quarter.

Thai Union’s share of loss from its Red Lobster affiliate hit THB 63 million (USD 1.9 million, EUR 1.6 million) in the third quarter, against losses of THB 54 million (USD 1.6 million, EUR 1.4 million) in the same quarter last year.  

The company’s net profit in the first nine months surged 27 percent to THB 6.08 billion (USD 184 million, EUR 159 million) and its sales in the period grew 3.6 percent to THB 102.55 billion (USD 3.1 billion, EUR 2.7 billion).

Thai Union saw its average sale price of skipjack tuna in the third quarter decline 6.7 percent year-on-year to USD 1,400 (EUR 1,200) per metric ton, and its whiteleg shrimp price in the period also shrank by 11.7 percent to THB 128 (USD 3.90, EUR 3.30) per kilogram.

Photo courtesy of T. Schneider/Shutterstock

Reporting from Hanoi, Vietnam

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