Fish & Seafood

Thai Union Logs Solid Profit Gain in Challenging Market

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The Thai Union Group posted a 16.9% rise in net profit for the second quarter of 2016, in comparison with the same period during the previous year. The 1.53 billion baht figure fell short, however, of the 1.7 billion baht target that was forecast.

Double-digit sales growth of 12.4% to 34.44 billion baht was attributed to a number of factors, including consolidation of the acquired Rügen Fisch operation into the global-reaching seafood organization that produces and markets a wide assortment of products ranging from frozen shrimp and ready meals to canned tuna, sardines and numerous other items.

As less than 8% of the Bangkok-headquartered company’s receipts were generated in Thailand, the baht’s depreciation against both the US dollar and euro has had positive impact on the bottom line. Exports to the United States accounted for 38.6% of sales during the first half of 2016, while shipments to the European Union and Japan respectively contributed 34.1% and 6.1% to the total. Revenues generated in the EU rose by 4.7%. At the same time, US purchase value slipped by 3.4% due to increased competition.

Gross profit margin of 15.8% declined slightly from 16.9% a year ago, due primarily to raw material price increases for shrimp and salmon. Sales of Thai Union branded items were stable at 43%. Numerous private label products accounted for the remaining 57% of receipts.

“This quarter clearly shows that efforts to drive efficiency in our operations and financing are working,” said CEO Thiraphong Chansiri. “Profit growth is being delivered even in a challenging market for raw materials and difficult economic conditions in various markets around the world.”