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Q1 2024 Sales Rise 1.7% to THB 33.2B as Thai Union Net Profit Soars 53.9%

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Thai Union Group reported a net profit of THB 1.2 billion in the first quarter of 2024, a 53.9 percent increase from the adjusted net profit posted in Q1 2023, which excludes share of profit and tax benefits from Red Lobster restaurant chain activities. The strong result was driven by a robust recovery in demand across core product categories.

Improved performances across all businesses helped lift sales by 1.7 percent in the first three months of the year to THB 33.2 billion from a year earlier. The group’s gross profit margin improved to 17.3 percent, driven by Frozen, PetCare, and Value-added categories.

“The focus on our core business of Ambient, Frozen, and PetCare has been instrumental in returning our business to growth,” said CEO Thiraphong Chansiri. “Our Group demonstrated great resilience during 2023 when we faced a challenging operating environment, and after seeing initial signs of a recovery in our performance in the final quarter of last year, I’m pleased to see that we have now emerged even stronger.”

In the first quarter, Ambient sales grew 12.7 percent year-on-year to an all-time high of THB 17.2 billion, with volumes rising 12.7 percent. This was driven by stronger demand across all regions, particularly in the Middle East, Europe and the United States. The gross profit margin, however, declined to 16.6 percent due to higher raw material prices.

The Frozen category saw sales decline 17.7 percent year-on-year largely as a result of soft demand in the United States market and the implementation of the rightsizing strategy, which started in Q2 2023. Frozen revenues in Q1 amounted to THB 9,618 million,  accounting for 29 percent to total sales.

PetCare sales increased 13.2 percent from a year earlier to THB 4.0 billion due to higher sales from the premium mix and price adjustment. Gross profit margin of 25.7 percent, the highest level since the second quarter of 2022, was realized.

Sales in the Value-added category rose by 10.8 percent compared to the first quarter of 2023 due to improve product mix and booked a record-high gross profit margin of 29.5 percent.

In terms of geographical diversity, sales in the US and Canada accounted for 38.6 percent of total revenues, followed by 29.6 percent from Europe, 10.9 percent from Thailand, and 20.9 percent from others.

Net profit experienced strong growth, compared to adjusted net profit of Q2 2023. This was driven by improvements across all business categories, despite reduced foreign exchange gains, lower share of profit, higher financial costs, and increase of the tax expenses.

During the quarter, the Japan Credit Rating Agency (JCR) raised the Thai Union Group’s foreign currency issuer credit rating from A- to A with a stable outlook. This rating is the same level as the sovereign credit rating of Thailand from JCR.

Since the beginning of 2024, Thai Union announced its third share buyback program, in order to reward shareholders by returning excess capital to them and boost earnings per share. Repurchases will not exceed THB 3.6 billion or 200 million shares. At the end of March 2024, the total cumulative number of shares acquired was 86 million, and Thai Union aims to continue repurchasing shares in the remaining period of the program.

Sustainability Commitment
The company’s commitment to sustainability remained a focus in the first quarter, as Thai Union announced a Zero Wastewater Discharge Project at its fish plant in Thailand to set a new global benchmark for a seafood factory by achieving 100 percent wastewater recycling. The Group also launched the Shrimp Decarbonization initiative, developed in collaboration with The Nature Conservancy (a global environmental organization) and the Ahold Delhaize USA food retailer, to reduce greenhouse gas emissions within the shrimp supply chain. Meanwhile, the Thai Union Feedmill became the first one in Asia to receive the Aquaculture Stewardship Council’s Feed Standard certificate, setting a new benchmark for sustainable feed production in the region.

About the Company
Founded in 1977, the Samut Sakhon-headquartered Thai Union Group ranks as one of the world’s leading seafood producers, with annual sales exceeding THB 136.2 billion (US $3.912 billion) and a global workforce of more than 44,000 people. Its extensive product range includes frozen shrimp, canned tuna, sardines, salmon, mackerel, tilapia, octopus, squid.