Thai Union Group PCL reported a 7.7% increase in third quarter 2016 consolidated sales to a record THB 35,128 million (approximately US $1 billion). This is the second consecutive quarter of record revenues for the Samut Sakon, Thailand-headquartered company, which is a major producer of frozen shrimp and ranks as the world’s largest packer of shelf-stable tuna products. Employing approximately 46,000 people globally, Thai Union rang up sales exceeding THB 125 billion (US $ 3.7 billion) last year.
Gross profit during Q3 2016 declined by 12.4%, while the gross profit margin was 14.1%, compared to 17.3% during the same period last year. 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 a number of positive one-time effects, coupled with stringent cost controls resulting in a selling, general and administration to sales ratio coming in at 8.7% – the lowest level in four years. As a consequence, net income remained stable with only a 1.9% year-on-year reduction to THB 1,594 million.
During the first nine months of 2016, sales in the United States continued to play an important role in the company’s revenue stream, accounting for 39% of total receipts year-to-date. Thailand’s domestic market contributed 8% of total sales, while Europe accounted for 33%, widening from 29.4% in full-year 2015. Sales in Japan represented 6% of receipts.
“We were able to deliver a very solid bottom line despite tighter market conditions,” reports Thai Union Group CEO Thiraphong Chansiri.Thiraphong Chansiri, chief executive officer of the Thai Union Group, commented: “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 revenue contribution from Thai Union’s brands remained stable at 43% year-to-date, with the balance coming from private label sales. Third quarter turnover 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 acquisition of Canadian lobster processor Les Pecheries de Chez Nous, improved domestic shrimp exports, and the consolidation of Rügen Fisch in Germany. Meanwhile, 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 US $575 million strategic investment in Orlando, Florida-headquartered Red Lobster, the world’s largest seafood restaurant chain, for a 25% equity stake and 10-year convertible preferred units of another 24%. The move was well received by Red Lobster management and employees, and positively regarded by industry analysts. Additionally, Thai Union acquired a minority interest of 18% from its Chicken of the Sea Frozen Foods subsidiary, thereby increasing ownership of the San Diego, California-based company to 100%.
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.
