INCREASE IN GROSS PROFIT FOR THAI UNION
Increase in gross profit for Thai Union. 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.
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 flavour, taking out the Best Tuna category in the PEOPLE Food Awards 2019: The Best Supermarket Products of the Year. INCREASE IN GROSS PROFIT