Thai Union CEO Thiraphong Chansiri. (Photo: TUF)

Thai Union experiences slight sales decline in a 'challenging' Q2

The sales of Thai Union Group PCL declined by 2 per cent year-on-year in the second quarter this year, to THB 34.1 billion (USD 1,021 million), a result that the company mainly attributed to the impact of the strong Thai baht and the decline in tuna sales.

Meanwhile, the firm’s net profit margin improved to 4 per cent from 2.9 per cent in the first quarter. Excluding foreign exchange impact, sales would have held stable at with a 0.1 per cent decline.

The gross profit of the group was THB 1,400 million (USD 41.9 million) and the net earnings improved by 40.2 per cent compared to the previous quarter, to THB 4,709 million (USD 141 million). The gross profit margin was 13.8 per cent compared to 11.3 per cent in the first quarter this year.

Thai Union's ambient seafood sales declined by 1.6 per cent in the second quarter and sales contribution from the frozen and chilled seafood business fell 2.6 per cent year-on-year. PetCare and value-added product sales fell 1.2 per cent over the same period last year.

In the first half of 2018, North America contributed 38 per cent of total sales, followed by Europe at 32 per cent, the Thai domestic market at 10 per cent, and other markets at 20 per cent.

However, Thailand, China and the Middle East continued to grow, with sales contributions improving due to the launch of new products and strong marketing and sales efforts.

"Despite continued pressures from volatile raw material costs and challenging market environments, we increased our gross margin and net profit showed improvement," said Thiraphong Chansiri, CEO of Thai Union.

In the second quarter, Thai Union’s subsidiary Chicken of the Sea reached a settlement with Walmart in the ongoing antitrust litigation in the US, and the company is in advanced negotiations in various other litigation discussions. As a result, Chicken of the Sea recorded a USD 44 million one time accrual to reflect potential risks.

On the other hand, Thai Union completed its 45 per cent acquisition of TUMD Luxembourg S.a.r.l (TUMD). TUMD wholly owns three Russian companies: Dalpromryba Limited Liability Company; Torgovo-Promyshlenny Kompleks "Dalpromryba" Limited Liability Company; and Maguro Limited Liability Company. These companies are collectively known as the DPR Group (DPR).

Besides, the firm reached an agreement in June to acquire a 25.1 per cent stake in Thammachart Seafood Retail Co., Ltd. (TSR) for approximately THB 37 million.

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Address:	72/1 Moo 7, Sethakit 1 Road, Tambon Tarsrai
City:	Amphur Muangsamutsakorn
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Country:	Thailand
Phone:	+66 2 298 0024
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