Thai Union Group reported its highest sales for 2023 in the fourth quarter, with a 4.8 percent quarter-on-quarter increase to THB 35.5 billion, driven by a strong rebound in the Frozen and PetCare categories. The Bangkok-headquartered seafood company, which is a major producer of frozen shrimp and canned tuna products, normalized net profit increased 3.1 percent from the third quarter to THB 1.24 billion, while the gross profit margin stood at 17.8 percent as the group demonstrated resilience amid steady external headwinds.
Sales for the full year declined 12.5 percent to THB 136.2 billion due to a very high baseline in 2022 and a normalization of logistics, which resulted in the full-year normalized net profit falling 37.0 percent to THB 4.5 billion. As announced in January, Thai Union booked a one-time non-cash impairment charge of THB 18.4 billion (US $527 million) during the fourth quarter after announcing its intention to pursue an exit of its minority investment in the Red Lobster restaurant chain. Since then, the group received approval for a one-time waiver from bondholders to exclude the impairment from 2023 net income covenant calculation. The financial outlook for Thai Union reportedly remains strong, with TRIS Rating affirming the Company’s A+ rating.
Frozen and chilled seafood sales grew 8.0 percent to THB 12.5 billion in the fourth quarter from the third quarter, while also delivering an all-time quarterly gross profit margin at 14.4 percent thanks largely to strategic rightsizing in the United States and improved inventory management. PetCare sales increased 22.5 percent quarter-on-quarter due to a recovery from key customers restocking, inventory levels normalizing, along with a key strategic focus on wet pet food and treats. Thai Union Group also had positive cash flow of THB 2.8 billion in the fourth quarter, driven largely by strong EBITDA and well managed net working capital.
“There were some significant challenges during 2023, with inflationary pressures across all markets where we operate, and an ongoing cost-of-living crisis which has impacted consumers’ spending power,” said Thai Union Group CEO Thiraphong Chansiri. “Despite these headwinds, we continued to demonstrate resilience which has been reflected in an improved performance in the fourth quarter, supported in part by the successful implementation of our profit protection plan across our entire business.”
He added: “While external challenges will persist in 2024, I am confident that Strategy 2030 will sharpen our focus on Thai Union’s core businesses of Ambient Seafood, Frozen, and PetCare which will help us drive stronger profitability and value for all shareholders.”
