Thai Union Group has reported a 3.7 percent year-on-year rise for fourth quarter sales in 2018 as it generated a record THB 36 billion in turnover. The Q4 operating profit improved 55.2 percent year-on-year to THB 1.50 billion, the highest quarterly margin in two years.
Workers on the job at one of Thai Union’s processing plants in Samut Sakhon, Thailand.The Bangkok-headquartered company credited performances from its frozen and chilled seafood businesses, augmented by the pet care segment, for contributing to the strong performance with price adjustments and operational improvements.
Consolidated FY2018 sales declined 1.2 percent year-on-year to THB 133.28 billion, due to the Thai baht’s appreciation against the US dollar. Excluding foreign currency impact, FY2018 sales would have increased by 0.5 percent year-on-year. FY2018 gross profit was down 2.2 percent year-on-year, due to material prices and foreign exchange rate volatility, mainly during the first quarter.
FY2018 Selling, General & Administration (SG&A) to sales ratio further reduced at 10.7 percent, as the company continued to focus on cost efficiencies with expenses down 1.2 percent year-on-year. FY2018 free cash flow came in at THB 8.40 billion, almost tripling FY2017, resulting in the company’s debt payment of THB 3.5 billion.
“Despite challenging market conditions, we stayed firmly focused on operational excellence and profitability improvement. Good results from the last quarter gives us confidence that 2019 will see a stronger and successful year,” said Thiraphong Chansiri, chief executive officer of Thai Union.
The company announced a final dividend of THB 0.15 per share, making a FY2018 dividend of THB 0.40 per share.
Sales in North America continued to play an important role in the Thai Union’s revenue, accounting for 39 percent of total sales, while Europe contributed 30 percent. Thailand’s domestic market grew to 11 percent of total sales, with Asia Pacific, Middle East, Africa and South America contributing 20 percent.
In 2019, Thai Union intends to achieve a five percent increase in organic sales growth and 15 percent gross profit margin. The company aims to maintain stringent cost control initiatives to keep SG&A-to-sales ratio at around 10% level. These should result in further profit recovery in 2019.
