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Thai Union Group 2Q net profit rises 16.9% as sales reach record high

  • 2Q16 net profit of THB 1,527 million, up 16.9% from a year earlier
  • 2Q16 sales of THB 34,441 million, up 12.4% year-on-year
  • 2Q16 FX gain of THB 32 million
  • Gross profit margin down slightly due to higher raw material costs

8 August, Bangkok — Thai Union Group PCL (TU) reported a 16.9% on-year rise in 2016 second quarter net profit to THB 1,527 million, supported by record sales and lower finance costs. Consolidated sales were a record-high THB 34,441 million, up 9.3% from the same period last year.

In 2Q16, Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) was THB 3,181 million, an increase of 11.9% year-over-year due to improved operations and lower finance costs because of continued debt repayments compared to the same period last year.

Operating profit reached THB 2,062 million, down 6.3% year-on-year. Gross profit improved by 4.5%, while the gross profit margin was 15.8%, down slightly from 16.9% in 2Q15. A rise in raw material costs, particularly in the salmon and shrimp businesses, contributed to the slightly weaker margin.

TU sales in the U.S. played an important role in the company’s revenue, accounting for 38.6% of total sales in 1H16. Thailand’s domestic market accounted for 7.9% of total sales, while the European Union contributed 34.1% of sales, widening from 29.4% in full-year 2015. Japan sales contributed 6.1% of total sales.

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

The sales contribution from Thai Union’s brands remained stable at 43% in the first half of 2016, with the balance coming from the company’s private label sales. Strong sales growth was due to the consolidation of Rugen Fisch into the Thai Union family, higher Skipjack tuna prices and an increase in salmon raw material prices. The Thai Baht’s depreciation against the U.S. dollar and the Euro was an additional supporting factor.