Thai Union saw its profits and sales jump in the second quarter largely thanks to the increase in demand for its ambient seafood during the COVID-19 pandemic, the company said in its Q2 results report released on 11 August.
The company earned a gross profit of THB 6.03 billion (USD 193.6 million, EUR 164.7 million) in the second quarter of 2020, up 12.4 percent year-on-year due to the “favorable growth of higher-margin branded ambient seafood business and improved operations.”
Thai Union’s ambient seafood category, including tuna, sardine, salmon, mackerel, and herring, mainly refers to shelf-stable items that are largely sold through retail channels and sometimes wholesalers.
The company’s gross profit margin in the second quarter was 18.2 percent, the highest level in three years, higher than 16.7 percent in the same period in 2019, thanks to the higher sales of ambient seafood.
Its net profit in the period soared 1,440 percent, or more than 15 times year-on-year, to THB 1.72 billion (USD 55.2 million, EUR 47 million). Thai Union said the increase would have been a positive growth of 13.4 percent if costs for settlement of an antitrust lawsuit in the U.S. in the second quarter of last year, or the legal fee of THB 1.4 billion (USD 45 million, EUR 38.2 million), were excluded.
“The strong growth was delivered despite high share of loss from Red Lobster affiliate due to the city shutdown,” the company said, adding that all the Red Lobster restaurants are now open to serve customers in the U.S. with necessary preventive measures applied during the pandemic. It said the guest capacity of the majority of the dining halls is at 50 to 75 percent.
Meanwhile, the Thai company said its sales in the second quarter went up 2.6 percent year-on-year to THB 33 billion (USD 1.06 billion, EUR 900 million) mainly due to the growth of 16.8 percent in sales value from the ambient seafood business.
The sales increase took place as consumers practice social distancing and home cooking, it said.
The company said its frozen and chilled seafood sales declined by 14 percent over April-June as the hospitality sector has experienced lockdown orders. Thai Union saw some sales recovery toward the end of the second quarter as more food service operators were gradually resuming operations.
"COVID-19 has presented enormous challenges to companies all around the world, both short-term and long-term. It has also led to increased demand for seafood products, particularly those stored in tins, in many parts of the world, with a corresponding effect on our sales and global supply chain,” Thai Union Group’s CEO Thiraphong Chansiri said.
The company’s average price of skipjack tuna in the second quarter dropped 4.1 percent to USD 1,267 (EUR 1,078) per metric tons (MT). The prices of whiteleg shrimp in the period also contracted by 4.5 percent to THB 146 (USD 4.7, EUR 4) per kilogram.
Thai Union said its global supply chain was not largely disrupted by the COVID-19 crisis in the first half of this year.
The company’s sales went up 4.2 percent year-on-year to THB 64.15 billion (USD 2.06 billion, EUR 1.75 billion) in the first six months while its net profit surged 97 percent from a year earlier to THB 2.73 billion (USD 87.7 million, EUR 74.6 million).
