Thai Union sales down 5% in challenging first quarter
Thai Union Group on Monday reported a year-on-year drop of 5.5 per cent in first-quarter sales to Bt29.7 billion, mainly due to the impact of declining tuna sales and a strengthening baht.
Net profit was Bt869 million, down 39.3 per cent from the same period last year.
Gross profit fell 26.2 per cent from a year earlier to Bt3.36 billion, while the gross profit margin was 11.3 per cent compared to 14.5 per cent a year earlier.
Inventories of higher-priced raw materials, particularly in the tuna business, along with the baht’s appreciation, contributed to the weaker margin, the listed company said.
Thai Union’s ambient sales were Bt14.1 billion, down 1.6 per cent year on year, while the sales contribution from frozen and chilled seafood business fell 8.9 per cent to Bt11.52 billion.
Pet care and value-added product sales fell 8.2 per cent to Bt4.08 billion over the same period last year.
In the first quarter, North America contributed 40 per cent of total sales, followed by Europe at 32 per cent. The domestic market accounted for 12 per cent.
Tougher market competition in North America, together with US dollar depreciation, saw the sales of ambient, frozen and chilled seafood decline in both value and volume in this key region, the company reported.
However, Thailand, China and the Middle East continued to grow, with sales contributions improving due to the launch of new products and increased marketing and sales activities.
Despite weaker profitability, the company’s strong cash flow prompted debt repayment and improved its net debt-to-equity ratio to 1.35 times in the first quarter, compared to 1.38 times at the end of 2017.
“Despite pressures from high raw-material inventory costs and challenging market environments, our net profit was supported by other incomes and prudent foreign-exchange management,” said chief executive officer Thiraphong Chansiri.
“Thai Union will continue to work harder to weather the industry’s volatility. Currently, the pressure from rising raw-material prices is beginning to relax as tuna product prices show signs of a more moderate increase,” he added.
Thai Union has continued its focus on expansion with an agreement to acquire 45 per cent of TUMD Luxembourg, which wholly owns three Russian companies, collectively known as the DPR Group.
DPR is a retail-focused fish and seafood business, and it is Russia’s No-1 canned tuna producer.
DPR, which has annual sales of around US$45 million (Bt1.43 billion), operates in both the frozen and ambient segments, and owns brands such as Maguro, Captain of Tastes and Rybar.
