Losses from its Red Lobster affiliate hampered the net profit of Bangkok, Thailand-based Thai Union in Q4 2022, despite the company achieving sales growth, according to its latest results report.
The company reported a net profit of THB 1.238 billion (USD 35.9 million, EUR 33.7 million) for the period spanning October to December 2022, falling 35.9 percent year-on-year. Its net profit for the full year also dropped 10.9 percent year-on-year to THB 7.138 billion (USD 207.3 million, EUR 194.1 million).
Thai Union mainly attributed the lower net profits for both Q4 and the entire 2022 to higher losses from Red Lobster. Losses from Red Lobster in Q4 2022 rose to THB 456 million (USD 13.2 million, EUR 12.4 million), much higher than the THB 256 million (USD 7.4 million, EUR 6.9 million) loss in the same period of 2021. Red Lobster’s preferred shares interest in the fourth quarter also decreased to zero, a decline from THB 319 million (USD 9.3 million, EUR 8.7 million) over Q4 2021.
Thai Union said the lower preferred shares interest from Red Lobster is the main reason behind the company’s lower other income of THB 253 million (USD 7.3 million, EUR 6.9 million) in the quarter. That was also lower than the THB 546 million (USD 15.9 million, EUR 14.8 million) the company earned from other income in the same period in 2021. The U.S.-based restaurant chain’s preferred shares interest for all of 2022 was THB 18 million (USD 520,000, EUR 490,000), down sharply from THB 1.216 billion (USD 35.3 million, EUR 33.1 million) in Q4 2021.
In addition to losses related to Red Lobster, Thai Union’s net profit in the fourth quarter was also affected by the “extremely volatile” exchange rate between USD and THB. The company’s foreign exchange losses in Q4 2022were THB 468 million (USD 13.6 million, EUR 12.7 million). Thatnegative contribution to Thai Union’s performance contrasts the financial exchange gains of THB 151 million (USD 4.4 million, EUR 4.1 million) in the same quarter of 2021.
In contrast to the lower net profit and poor performance of Red Lobster, the company’s sales value in Q4 2022 increased 2.9 percent year-on-year to THB 39.613 billion (USD 1.15 billion, EUR 1.08 billion).
Ambient seafood sales increased 12.8 percent year-on-year in Q4 2022, thanks largely to higher selling prices and higher demand from Asia and the U.S. Thai Union’s ambient seafood category includes shelf-stable products like tuna, sardines, salmon, mackerel, and herring, which are largely sold through retail channels and sometimes wholesalers.
Its sales of pet-care products also surged 34 percent year-on-year, driven by strong demand, better selling prices, product mix, and the expansion of new products offered to new customers.
However, Thai Union’s sales of frozen and chilled seafood in Q4 2022 shrank by 13 percent year-on-year, which was attributable to “the impact of market price normalization in the U.S., particularly lobster and crab, higher logistics costs, and higher raw material prices.”
Thai Union’s tuna price in Q4 2022 was USD 1,660 (EUR 1,554) per metric ton (MT), up 2.7 percent year-on-year. Its salmon price in the quarter grew 20.8 percent year-on-year to NOK 73.00 (USD 7.10, EUR 6.60) per kilogram, while its vannamei shrimp price went up 17.8 percent year-on-year to THB 154 (USD 4.50, EUR 4.20) per kilogram, the company’s data showed.
For the full year 2022, Thai Union’s sales value hit an all-time high of THB 155.6 billion (USD 4.52 billion, EUR 4.23 billion), up 10.3 percent from 2021, mainly thanks to the growth in sales of its pet-care products, value-added products and ambient seafood.
“Amidst unforeseen global economic challenges such as high inflation and volatile foreign exchange, Thai Union was able to deliver a strong performance and record sales. Our core businesses remain a key focus for Thai Union, but we continue to further diversify our portfolio of products to appeal to new customers across Asia, Europe and North America,” Thai Union CEO Thiraphong Chansiri said. “We also continue to develop value-enhancing businesses across our ingredients, supplements and alternative protein units, where we are unlocking new and innovative products that will be essential to our future growth.”
Chansiri said the company aims to grow its sales this year by between 5 and 6 percent from 2022 and raise its capital expenditure to between THB 6 billion and THB 6.5 billion (USD 174.3 million and USD 188.8 million, EUR 163.2 million and EUR 176.8 million).
According to Thai Union, the freight cost and ocean transit time have improved in the fourth quarter. However, inflation will continue to impact its operations across all the markets.
Photo courtesy of Thai Union
