Thai Union Group 3Q Sales Hit Record THB 35,185 Million Despite Tough Market Conditions
Caption: International and local brands under Thai Union Group
- 3Q17 net profit of THB 1,737 million, rising 8.9 percent from a year earlier
- 3Q17 sales of THB 35,185 million, up 0.4 percent year-on-year
- Red Lobster and cost saving initiatives strong contributors
6 November 2017, BANGKOK - Thai Union Group PCL (Thai Union) reported a 0.4 percent year-on-year sales increase in 3Q17 to a record THB 35,185 million despite significant currency exchange fluctuations and increased raw material costs. Consolidated net profit was THB 1,737 million, up 8.9 percent from the same period last year.
Third quarter gross profit declined 5.6 percent from a year earlier to THB 4,658 million, while the 3Q17 gross profit margin was 13.2 percent compared to 14.1 percent in 3Q16.
Sharply higher raw material prices, particularly from near record high tuna prices, along with continued European currency depreciations and a stronger Thai baht, contributed to the weaker margin.
Among Thai Union’s three major businesses, PetCare and value-added 3Q17 product sales grew the most at 2.9 percent year-on-year to THB 4,580 million, on continued growth in the PetCare business. The ambient business sales rose 2.4 percent from the same period last year to THB 15,836 million on rising tuna prices, while sales from the frozen and chilled seafood business fell 2.4 percent year-on-year to THB 14,770 million.
During the first nine months of 2017, net profit grew 6.1 percent year-on-year to THB 4,617 million while total sales rose 0.8 percent to THB 101,430 million from the same period last year.
The sales contributions from Thai Union’s own brands remained stable at 43 percent in the first nine months, 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 nine months, followed by Europe at 32 percent, the Thai domestic market at 10 percent, Japan at six percent and other markets at 14 percent.
Amid operational seasonality, the Red Lobster business in the U.S. remained strong and contributed THB 380 million to third quarter net profit, mainly from tax savings and interest yields.
The net debt to equity ratio was maintained at 1.37 times year to date despite pressured raw material costs and increasing working capital requirements. Third quarter expenses on selling and administration increased slightly to 9.1 percent (excluding one-time restructuring cost, reported 9.5%).
“Our strategy in geographic and product diversity is helping us weather today’s market and industry’s volatility. We will continue to focus on diversification for our long-term growth,” said Thiraphong Chansiri, CEO of Thai Union Group.
“Continuous improvements, review of costs and streamlining of our operations has helped us during this time of margin pressure,” he continued.
Recently, Thai Union has been recognized for its efforts in sustainability. The company was shortlisted for two awards, including Sustainability Leader of the Year and Sustainability Report of the Year, at the Ethical Corporation’s Eight Annual Responsible Business Awards.
Dr. Darian McBain, Thai Union’s global director for sustainable development, was highly commended by judges for being “a leader who is unafraid to seize relationships when values are being compromised” along with her role at the forefront of the company’s “impressive range of initiatives, that suggest a broader, more holistic and integrated understanding of sustainability as encompassing both social as well as environmental issues,” according to Ethical Corporation’s press release.
Additionally, Thai Union was highly commended for its most recent Annual Sustainability Report. Judges remarked: “Overall this company has been innovative in their use of SeaChange® (Thai Union’s sustainability strategy) and thoroughly explained how they report.”
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 is available to download at the company’s website: http://www.thaiunion.com/en/sustainability/report
Thai Union was also honored as one of the Asia Corporate Excellence & Sustainability Awards (ACES) winners for Top Corporate Social Responsibility Advocates for the company’s leading various CSR initiatives.
In September, Thai Union was named to the Dow Jones Sustainability Index (DJSI) Emerging Markets for the fourth straight year. The company’s sustainability strategy, SeaChange®, successfully drove the score with industry best-in-class 100th percentile rankings for Climate Strategy, Materiality, Human Capital Development, Health and Nutrition, Water Related Risks, and Policy Influence.
Furthermore, strong performances in Supply Chain Management, Business Codes of Conduct and Labor Practice Indicators, helped propel Thai Union into the 97th percentile ranking among companies in the industry.
The DJSI Emerging Markets is a highly-regarded sub-index that evaluates companies in emerging markets on their sustainability performance with over 3,000 companies participating in the assessment.
“People at Thai Union work hard, with passion and willingness to embrace our role as a leader for positive change, striving for strong and sustainable growth,” said Chansiri.
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ABOUT THAI UNION GROUP PCL
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 almost 40 years.
Today, Thai Union is regarded as the world’s largest producer of shelf-stable tuna products with annual sales exceeding THB 125 billion (US$ 3.7 billion) and a global workforce of over 46,000 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, 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. Thai Union’s on-going work on sustainability issues was recognized by its inclusion in the Dow Jones Sustainability Index Emerging Markets (DJSI) in 2014. In 2017, Thai Union was named to the DJSI for the fourth consecutive year. Thai Union has also been included in the FTSE4Good Emerging Index.
MEDIA CONTACTS
Ms. Krissana Parnsoonthorn
Head of External Affairs
M: +66.0.61.418.1461
Office: +662.298.0024 ext 4423
E: Krissana.parnsoonthorn@thaiunion.com