Thai Union Group 1Q Net Profit Rises 19.3 percent in Challenging Environment
• 1Q17 sales of THB 31,427 million, up 0.7 percent year-on-year
• Red Lobster a significant contributor to net profit growth
8 MAY 2017, BANGKOK – Thai Union Group PCL (Thai Union) reported a 19.3 percent year-on-year rise in 2017 first quarter net profit to THB 1,469 million, with a strong contribution from Red Lobster along with foreign exchange gains. Consolidated sales were THB 31,427 million, up 0.7 percent from the same period last year.
Gross profit declined 13.3 percent from a year earlier to THB 4,330 million, while the gross profit margin was 13.8 percent compared to 16 percent in 1Q16. Higher raw material prices, particularly in the tuna and shrimp businesses, along with currency appreciation, contributed to the weaker margin.
Sales contribution from Thai Union’s frozen and chilled seafood business rose to THB 12,914 million, up 5.6 percent over the same period last year, despite continued sluggish demand in Europe for the ambient business. In addition, PetCare and value-added product sales grew 17.4 percent year-over-year to THB 4,444 million due to new product launches and continued market penetration improvement.
The sales contributions from Thai Union’s own brands remained stable at 42 percent in the first quarter, with the balance coming from the company’s private label and food services sales. The U.S. remained the largest market with 40.3 percent of total sales in 1Q17, followed by Europe at 31 percent, the Thai domestic market at 8.1 percent, Japan at 6.4 percent and other markets at 14.2 percent.
“We’re pleased with our strong profit growth, despite persistent challenges in raw material costs coupled with variable economic conditions in many markets,” said Thiraphong Chansiri, CEO of Thai Union Group.
“Our strategic investment in Red Lobster is already delivering positive results, and we are working together on a number of operational initiatives that will further strengthen their performance,” Chansiri added.
In December 2016, Thai Union announced an ambitious strategy to ensure 100 percent of its branded tuna is sustainably sourced with a commitment of achieving a minimum of 75 percent by 2020. As part of the new tuna strategy, Thai Union is investing USD 90 million in sustainability initiatives, which includes establishing 11 new Fishery Improvement Projects around the world.
In line with SeaChange, Thai Union’s sustainability strategy, Thai Union donated USD 50,000 for a fishery improvement project in Indonesia, while in February it was announced that Thai Union Group’s 2015 Sustainability Report earned the number-one ranking in Asia for sustainability reporting in the Top 100 Seafood Firms’ Transparency Benchmark from Seafood Intelligence, a global news service that reports on the seafood sector and evaluates the industry’s sustainability data and transparency levels. Thai Union was rated in the top five of all wild-catch fisheries firms worldwide and in the top three of wild-catch tuna fishing companies globally.
Additionally, Thai Union, in partnership with the Clinton Climate Initiative, officially broke ground on a wastewater and biogas project at its Indian Ocean Tuna Seychelles facility. The project will cut carbon emissions and reduce energy costs, while generating clean electricity and cleaner wastewater.
“We remain deeply committed to sustainable development. Every day, Thai Union is working to ensure the company values we embrace are being translated into real and demonstrable change for good,” said Chansiri.