Thai Union Group (TU) achieved record net profit (before one time expenses) of THB 6.1 billion (EUR 155.5 million; USD 170.8 million) for the full year 2015, up 19.1 percent on the previous year, thanks to record annual sales of THB 125.2 billion (EUR 3.2 billion; USD 3.5 billion), which was 3.1 percent higher than in 2014.
After the non-operational one-time expenses, the international seafood supplier reported net profit of THB 5.3 billion (EUR 135.1 million; USD 148.4 million), while its earnings between interest, taxes, depreciation and amortization (EBITDA) was THB 11.5 billion (EUR 293.1 million; USD 321.9 million) – both new records.
TU attributed the results to a number of positive factors, including: The strong performance of its leading seafood brands in Europe; the successful integration of recent acquisitions, such as European smoked salmon producer MerAlliance, sardine brand King Oscar and lobster supplier Orion; the strong recovery of its Thai shrimp processing operations; and the successful restructuring of its U.S.-based pet food producer USPN.
The U.S. dollar appreciation against Thai baht in the latter part of last year also created positive impact.
However, the company acknowledged that it faced a number of challenges in 2015, among them the “highly volatile” euro, “sharply lower” tuna and shrimp raw material prices, and concerns from major importing countries' relating to Thailand's sustainability issues as well as the cancellation of the Bumble Bee transaction in early December 2015.
Thiraphong Chansiri, president and CEO of TU, said the record results demonstrated the company’s resilience and ability to grow in spite of a host of challenges faced by Thailand and the global seafood industry.
“Volatile foreign exchange rates, global correction of tuna and shrimp prices, uncertain global economic conditions and sustainability issues faced by Thailand did not discourage us from outperforming the industry. Our top line might be a bit short of the original target, our bottom line has nevertheless more than made up for the shortfall, allowing us to set another record level.
“If without certain one-time expenses due to acquisitions and restructuring our fishing fleet in the last quarter, our bottom line would have set an even higher record,” said Chansiri.
Based on TU’s sales in 2015, the tuna category commanded the largest share of business, accounting for 37 percent of sales, followed by shrimp and related businesses with 29 percent, salmon with 9 percent, pet foods 7 percent, sardines and mackerel 6 percent, and value-added and other products 12 percent.
From 2016, its sales will be reported in just three categories: ambient seafood; frozen, chilled and related seafood; and pet care, value-added and other products.
The company said it holds an “optimistic view” on 2016 in spite of uncertain world economic conditions and their potential impact on consumption and commodity prices.
"We are well positioned for another solid year in 2016. The year is a period which we would reset our base for further growth. A lot of new initiatives are being launched this year, namely our continual drive for innovations in products and production processes, a new focus on serving food service customers and emerging markets, namely the Middle East, Southeast Asia and China. Therefore, growth will be primarily driven by these new endeavors and the full consolidation of Rugen Fisch, which is our latest 51 percent acquisition of the leading seafood producer with own brands in Germany, into the group," said Chansiri.
“In order to deliver our expected results, we cannot achieve it without sustainability in mind and in action. Despite the challenges Thailand is facing, we are committed to ensuring our supply chain free of these labor and environmental issues, setting a benchmark for the industry on this front. We take sustainable development seriously as a strategic opportunity for growth rather than a threat or burden. We will continue to drive on this and make sure our suppliers and the broader industry partners to be on board as well."
Despite the cancellation of the Bumble Bee late last year, TU is holding on to its 2020 sales target of USD 8 billion (EUR 7.3 billion).
"New initiatives just mentioned plus continual expansion of our existing business lines will not be enough to make our 2020 target. We would therefore continue to pursue synergistic acquisition opportunities to strengthen our group as well as meeting our top line target. We are looking at opportunities that can eventually add sales worth USD 1-1.5 billion (EUR 910.7 million – 1.4 billion) in total in [the] next five years. With all the new and existing talents we have on board, I believe that the 2020 target is within reach."
