Thai Union Group 3Q16 sales rise 7.7% to record USD 1 Billion Quarter
- 3Q16 net profit of THB 1,594 million, down 1.9% from a year earlier
- 3Q16 sales of THB 35,128 million (USD 1 billion), up 7.7% year-on-year
- Solid bottom line despite lower gross profit margin due to raw material costs
7 November 2016, Bangkok - Thai Union Group PCL reported a 7.7% on-year rise in 2016 third quarter consolidated sales to a record THB 35,128 million (USD 1 billion). This is the second consecutive quarter of record sales.
Gross profit declined by 12.4%, while the gross profit margin was 14.1%, compared to 17.3% as reported in 3Q15. Continued high salmon raw material prices and higher than expected tuna prices contributed to the weaker margin, while moderate foreign exchange losses of THB 30 million were recorded. This was partly offset by stringent cost controls with 3Q16 Selling, General & Administration to sales ratio coming in at 8.7%, the lowest level in four years as well as some positive one-time effects. As a result, net income remained stable with only 1.9% year-on-year reduction to THB 1,594 million.
During the first nine months of 2016, sales in the U.S. continued to play an important role in the company’s revenue, accounting for 39% of total sales year-to-date. Thailand’s domestic market accounted for 8% of total sales, while Europe contributed 33% of sales, widening from 29.4% in full-year 2015. Japan sales contributed 6% of total sales.
Thiraphong Chansiri, CEO of Thai Union Group noted, “This quarter clearly shows that demand for our products is strong despite a challenging market for raw materials and continued difficult economic conditions in various markets around the world. We were able to deliver a very solid bottom line despite tighter market conditions.”
In the first nine months, the sales contribution from Thai Union’s brands remained stable at 43% year-to-date, with the balance coming from the company’s private label sales. 3Q16 sales for the frozen and chilled seafood business rose to THB 15.1 billion, up 14.7% over the same period last year. The increase in sales volume was due to the Chez Nous acquisition during the third quarter, improved domestic shrimp exports, and the consolidation of Rügen Fisch in Germany. PetCare and Value-Added sales surged to THB 5,257 million, an increase of 28.3% year-over-year.
In October, Thai Union made a USD 575 million strategic investment in Red Lobster, the world’s largest seafood restaurant chain, for a 25% equity stake and 10-year convertible preferred units of another 24%. The investment was well received by Red Lobster management and employees, in addition to positive response from industry analysts. Additionally, Thai Union acquired a minority interest of 18% from its subsidiary Chicken of the Sea Frozen Foods. Thai Union now holds 100% of the company.
Recently, Thai Union was short-listed for the Thomson Reuters Foundation's inaugural Stop Slavery Award, in addition to being named to the Dow Jones Sustainability Indices for the third consecutive year.
Thai Union Group PCL
Thai Union Group PCL is the world’s seafood leader bringing high quality, healthy, tasty and innovative seafood products to customers across the world for almost 40 years.
Today, Thai Union is regarded as the world’s largest producer of shelf-stable tuna products with annual sales exceeding THB 125 billion (USD 3.7 billion) and a global workforce of over 46,000 people who are dedicated to pioneering sustainable, innovative seafood products.
The company’s global brand portfolio includes market-leading international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar, and Rügen Fisch and Thai-leading brands SEALECT, Fisho, Bellotta and Marvo.
As a company committed to innovation and globally responsible behavior, Thai Union is proud to be a member of the United Nations Global Compact, and a founding member of the International Seafood Sustainability Foundation (ISSF). In 2015, Thai Union introduced its SeaChange® sustainability strategy. Thai Union’s on-going work on sustainability issues has been recognized by its inclusion in the Dow Jones Sustainability Indices Emerging Markets (DJSI) in 2014. In 2016 Thai Union was named to DJSI for the third consecutive year. http://www.thaiunion-sustainability.com/.