- Sales down 4.6 percent to THB 32,214 million due to foreign exchange impact, focus on higher margin business
- 2Q19 gross profit improves 13.1 percent to THB 5,364 million; 1H19 gross profit up 19.9 percent year-on-year
- Normalized net profit up 10.6 percent year-on-year to THB 1,513 million which is equivalent to 4.7 percent of revenue
6 August 2019, Bangkok – Thai Union Public PCL (Thai Union) reported a 13.1 percent increase in gross profit in the second quarter of the year, with stronger performances from the frozen seafood and PetCare and value-added product businesses.
Gross profit for the period was THB 5,364 million, while the gross profit margin improved to 16.7 percent from 14.0 percent in the second quarter of 2018. The strong gross profit resulted in a stronger EBITDA at 15.4 percent compared to the same period a year earlier and an interim dividend of THB 0.25 per share.
Consolidated sales during the quarter declined 4.6 percent year-on-year to THB 32.2 billion due to the Thai baht’s appreciation, the depreciation of EU currencies and lower raw material prices. However, organic sales volumes continued to grow, particularly in the frozen seafood and PetCare businesses supported by Thai Union’s strategy to pursue more value-added products.
In the first half of 2019, North America contributed 39 percent of total sales, followed by Europe at 29 percent, the Thai domestic market at 12 percent, and other markets at 19 percent.
Thai Union's ambient seafood sales in 2Q19 were THB 14,031 million, down 14.3 percent year-on-year, while gross profit was up 9.1 percent year-on-year. The sales contribution from the frozen and chilled seafood business increased 3.6 percent year-on-year to THB 13,435 million, driven mainly by volume growth of 10 percent from the same period last year. PetCare and value-added product sales increased 6.7 percent to THB 4,747 million from the second quarter of 2018, with significant sales volume growth of 5.9 percent.
“Profitability remains a key focus for us at Thai Union, and the overall performance in the second quarter was pleasing, particularly in a challenging operating environment,” said Thiraphong Chansiri, CEO of Thai Union. “As we look ahead, Thai Union will continue to see new innovative products developed and launched into market, which will provide us with new revenue streams as we work to build a business with sustainable growth.”
During 2Q19, Thai Union subsidiary Chicken of the Sea reached a settlement with a majority of plaintiffs in an ongoing antitrust litigation in the U.S., resulting in an additional THB 1,402 million after tax. Excluding the one-time accrual, the company recorded a net profit of THB 1,513 million.
“We share this updated litigation status as Chicken of the Sea has now appropriately provided for any financial impact,” said Joerg Ayrle, Group Chief Financial Officer.
Thai Union continues to invest in innovation, and in June its new Global Innovation Center in Bangkok was officially opened by Her Royal Highness Princess Maha Chakri Sirindhorn. The facility has been expanded to over 5,000 square meters, and houses more than 160 scientists and researchers from around the world.
Thai Union also released its Sustainability Report during the quarter, detailing the positive progress the company made in 2018 and its performance against key performance indicators and targets outlined in its SeaChange® strategy. Thai Union’s sixth sustainability report demonstrates how the company’s commitments and measures are helping the company drive meaningful improvements across the entire industry. The report can be read here.
During the second quarter, Thai Union was also recognized for both its business management and sustainability efforts. At the 9th Asian Excellence Awards 2019, Thiraphong Chansiri won Asia’s Best CEO and Thai Union was awarded Best Investor Relations Company in Thailand, while the company was recognized by Asiamoney in the Best Managed Companies Awards, awarded to the most impressive companies across Asia-Pacific for the past three decades. At the SeaWeb Seafood Summit 2019, Dr. Darian McBain, Thai Union’s Global Director of Corporate Affairs and Sustainability, won the Seafood Champion Award for Vision, while she was also awarded the Bronze prize in the individual Leader of the Year category at the Global Good Awards. Thai Union’s brands have also been recognized, with John West winning the Marine Stewardship Council’s (MSC) 2019 UK Canned Brand of the Year Award for the third consecutive year, and Chicken of the Sea Infusions, Basil flavor, taking out the Best Tuna category in the PEOPLE Food Awards 2019: The Best Supermarket Products of the Year.
ABOUT THAI UNION GROUP
Thai Union Group PCL is the world’s seafood leader bringing high quality, healthy, tasty and innovative seafood products to customers across the world for more than 40 years.
Today, Thai Union is regarded as the world’s largest producer of shelf-stable tuna products with annual sales exceeding THB 133.3 billion (US$ 4.1 billion) and a global workforce of over 47,000 people who are dedicated to pioneering sustainable, innovative seafood products.
The company’s global brand portfolio includes market-leading international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar, and Rügen Fisch and Thai-leading brands SEALECT, Fisho, Qfresh, Monori, Bellotta and Marvo.
As a company committed to innovation and globally responsible behavior, Thai Union is proud to be a member of the United Nations Global Compact, and a founding member of the International Seafood Sustainability Foundation (ISSF). In 2015, Thai Union introduced its SeaChange® sustainability strategy. Find out more at seachangesustainability.org. Thai Union’s on-going work on sustainability issues was recognized in 2018 by being ranked number one in the world in the Food Products Industry in the Dow Jones Sustainability Index, achieving a 100th percentile ranking for total sustainability score. Thai Union has now been named to the DJSI for five consecutive years. Thai Union was also named to the FTSE4Good Emerging Index for the third straight year in 2018.
Head of External Communication