- 1H17 net profit of THB 2,880 million, rising 4.4 percent from a year earlier
- 1H17 sales of THB 66,244 million, up 1 percent year-on-year
- Red Lobster operation and cost saving initiatives strong contributors
7 August 2017, BANGKOK - Thai Union Group PCL (Thai Union) reported a 1.2 percent year-on-year sales increase in 2Q17 to THB 34,818 million despite significant currency exchange fluctuations and variable market conditions. Consolidated net profit was THB 1,411 million, down 7.6 percent from the same period last year.
The second quarter gross profit declined 14.5 percent from a year earlier to THB 4,669 million, while the 2Q17 gross profit margin was 13.4 percent compared to 15.9 percent in 2Q16.
Higher raw material prices, particularly in the tuna business, along with multiple European currency depreciations, contributed to the weaker margin.
Among Thai Union’s three major businesses, PetCare and value-added 2Q17 product sales grew the most at 12.9 percent year-on-year to THB 4,502 million, due to new product launches and improved market penetration. The frozen and chilled seafood business expanded 6 percent year-on-year with sales contribution at THB 13,944 million, while sales from the ambient business fell 2.8 percent from the same period last year to THB 16,371 million due mainly to sluggish demand and currency depreciations in Europe, coupled with rising tuna prices.
For the first half of 2017, Thai Union posted a net profit of THB 2,880 million, improving 4.4 percent year-on-year, with sales totaling of THB 66,244 million, up 1 percent from the year before.
The sales contributions from Thai Union’s own brands remained stable at 43 percent in the first half, with the balance coming from the company’s private label and food services sales. The U.S. remained the largest market with 38 percent of total sales in the first six month, followed by Europe at 33 percent, the Thai domestic market at 8 percent, Japan at 6 percent and other markets at 15 percent.
Despite the operational seasonality, the Red Lobster business in the U.S. remained strong and contributed THB 235 million to the net profit in the second quarter of this year, mainly from tax savings and interest yields.
With stringent cost control, the second quarter expenses on selling and administration fell 9.6 percent year-on-year to THB 3 billion. The net debt to equity ratio improved to 1.33 from 1.37 at the beginning of the year, following improved cash management efforts.
“We’re satisfied with our operational resilience despite facing persistent challenges in higher raw material costs and variable economic conditions in many markets,” said Thiraphong Chansiri, CEO of Thai Union Group.
“Our strategic investment in Red Lobster and effort in cost control continue to deliver positive results,” he added.
In June 2017, Thai Union launched its annual Sustainability Report, publicly detailing the company’s performance from January through December 2016 against key performance indicators and targets outlined in SeaChange®, Thai Union’s sustainability strategy. The report details how Thai Union’s strategic approach to sustainability is transforming the way the seafood industry operates worldwide. It covers the sustainability progress on Thai Union’s journey across every aspect of its business: from how the company looks after the oceans to how it manages waste; from the responsibility Thai Union takes for its workers to building brighter futures for communities where the company operates. The report can be downloaded here.
Building upon SeaChange®, Thai Union entered into a joint agreement in July with Greenpeace to commit to more sustainable, socially-responsible seafood – acknowledging a shared vision for healthy seas now and for future generations. In June, at a World Economic Forum (WEF) meeting in New York City, Thai Union committed to the WEF’s Tuna 2020 Traceability Declaration, which supports the United Nations Sustainable Development Goals (SDGs). Thai Union also signed a groundbreaking pledge as part of its membership in the Seafood Business for Ocean Stewardship, committing to improve operations as well as challenge the rest of the seafood industry to follow, all with the goal of helping the world achieve the SDGs.
Additionally, Thai Union recently launched, along with a coalition of other industry and government groups such as the U.S. Agency for International Development's Oceans and Fisheries Partnership (USAID Oceans), a digital traceability pilot program. Inmarsat’s “Fleet One” terminals were successfully installed on fishing vessels in Thailand, while the crew members, captains and fleet owners were trained on “Fish Talk” chat applications developed by Xsense that enable them to connect with families and peers around the world while at sea – an industry first for Thai fisheries.
“Thai Union has fully embraced its role as a leader for positive change as one of the largest seafood companies in the world,” said Chansiri. “Looking forward, Thai Union will continue to make progress and maintain an unceasing focus on leveraging its leadership position and collective strengths to face down and resolve the sustainability challenges that confront the industry.”