PROFIT BOOST FOR THAI UNION
Profit boost for Thai Union
Thai Union Group PCL (Thai Union) reported a 46.5 percent year-on-year rise in its 2019 first quarter net profit to THB 1,273 million, as operational improvements continued, gross margins recovered further and sales volumes increased.
Gross profit increased 29.3 percent from a year earlier to THB 4,382 million, while the gross profit margin improved to 14.9 percent from 11.6 percent in the first quarter last year. Stable raw material prices along with stronger performances from Thai Union’s ambient seafood and PetCare businesses contributed to the recovery. Operating profit increased ten-fold year-on-year to THB 1,020 million with the Selling, General & Administration (SG&A) ratio at 11.4 percent, compared to 11.2 percent in the first quarter of 2018.
Consolidated sales were THB 29,369 million, up 0.1 percent from a year earlier. However, excluding the impact of foreign exchange, sales value growth improved 2.3 percent year-on-year, driven largely by sales growth in the frozen and PetCare businesses.
The sales contribution from Thai Union’s frozen and chilled seafood business rose to THB 11,529 million, up 3.4 percent year-on-year, due to improved frozen seafood sales in the U.S. In addition, PetCare and value-added product sales grew 7.5 percent year-over-year to THB 4,384 million on higher volumes.
Sales contributions from Thai Union’s 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 40.4 percent of total sales in 1Q19, followed by Europe at 27.9 percent, the Thai domestic market at 13.1 percent, Japan at 4.7 percent and other markets at 13.9 percent.
Another strong cash flow performance from operations helped to continue the deleveraging of the net debt to equity ratio to 1.35 from above 1.4 a year earlier. During the quarter there was also growth from Thai Union Ingredients after the first 100 metric tons of refined tuna oil were shipped to customers producing infant formula.
“Our first quarter performance was a positive start to the year for Thai Union. Thanks to continued operational efficiencies and continued margin recovery, we are starting to see the flow-on benefits, with a recovery in our overall performance and normalizing of our operations,” said Thiraphong Chansiri, CEO of Thai Union Group.
During the first quarter, Thai Union continued to make positive progress in line with its sustainability strategy, SeaChange®. Alongside its partner WWF, Thai Union released its first Sourcing Transparency: Wild Caught Fish and Shellfish report, an important plank in the company’s commitment to transparency across all its operations.