Record sales for Thai Union, net profit rises

Published on
August 9, 2016

Thai Union Group PCL (TU) achieved net profit in excess of THB 1.5 billion (USD 42.9 million, EUR 38.7 million) in the second-quarter of this year, representing a 16.9 percent year-on-year increase, thanks to record sales of THB 34.4 billion (USD 983.8 million, EUR 887.1 million) and lower finance costs.

The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) was THB 3.2 billion (USD 91.5 million, EUR 82.5 million) in Q2 2016, an increase of 11.9 percent year-on-year – largely due to improved operations and lower finance costs because of continued debt repayments compared to the same period of last year.

Operating profit reached THB 2.1 billion (USD 60.1 million, EUR 54.2 million), down 6.3 percent year-on-year. Gross profit improved by 4.5 percent, while the gross profit margin was 15.8 percent, down slightly from 16.9 percent in Q2 2015.

A rise in raw material costs, particularly in the salmon and shrimp businesses, contributed to the slightly weaker margin.

Sales in the U.S. market played an important role in TU’s revenue, accounting for 38.6 percent of total sales in the first-half of this year. Thailand’s domestic market accounted for 7.9 percent of total sales, the EU contributed 34.1 percent of sales, and sales in Japan sales accounted for 6.1 percent of total sales.

"This quarter clearly shows that our efforts to drive efficiency in our operations and financing are working. Profit growth is being delivered even in a challenging market for raw materials and difficult economic conditions in various markets around the world,” said Thiraphong Chansiri, CEO of TU.

The sales contribution from TU’s brands remained stable at 43 percent in H1 2016, with the balance coming from the company’s private label sales.

Strong sales growth resulted from the consolidation of Rugen Fisch into the Thai Union fold, as well as higher skipjack tuna prices and an increase in salmon raw material prices.

The Thai baht’s depreciation against the U.S. dollar and the euro was an additional supporting factor, the company said.

Contributing Editor reporting from London, UK

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