Bangkok-headquartered frozen and canned seafood producer and marketer Thai Union Group on February 20 reported a 1.6 percent year-on-year rise for FY2017. Consolidated sales hit a record THB 136.53 billion (approximately $4.332 billion, or €3.51 billion).
Gross profit was THB 18.14 billion, while the gross profit margin stood at 13.3 percent, compared to 14.8 percent for FY2016. High tuna prices contributed to the weaker margin, which was partly offset by prudent foreign exchange management and stringent cost controls with FY2017’s selling, general and administration to sales ratio coming in at 9.8 percent, below the full-year target of 10 percent. As a result, FY2017 net profit surged 14.6 percent year-on-year to a record THB 6.02 billion (approximately $191 million, or €155 million).
Thai Union announced a final dividend of THB 0.34 per share, making a 2017 full-year dividend of THB 0.66 per share, representing a 5% dividend payout growth from 2016 despite strong operational headwinds.
North America Top Market
For 2017, sales in North America continued to be the biggest contributor to the company’s revenue stream, accounting for 40 percent of total sales, while Europe delivered 32 percent. Thailand’s domestic receipts grew to 10 percent of total sales, with Japan contributing six percent. Revenues generated among major customer bases marginally shifted in favor of domestic and emerging markets, partly due to strong penetration efforts in China.
Thai Union CEO Thiraphong Chansiri is pleased to report that profitability in 2017 remained resilient despite market volatility and rising raw material prices. “Despite market volatility and higher raw material prices, our profitability remained resilient in 2017,” said Thiraphong Chansiri, chief executive officer of Thai Union. “Raw material price pressures are relaxing as tuna prices started to decline since the fourth quarter of 2017.”
The FY2017 sales contribution from Thai Union brands rose slightly to 42 percent, with the balance coming from private label sales. Ambient product receipts were stable at THB 61.14 billion. FY2017 sales of frozen and chilled seafood climbed 2.7 percent year-on-year to THB 57.31 billion. PetCare and value-added revenues rose to THB 18.07 billion, an increase of 3.5 percent over FY2016.
The rise in company sales value was driven by continued organic growth and increased contribution from the Red Lobster restaurant chain in the USA.
Thai Union’s Chicken of the Sea International and Chicken of the Sea Frozen Foods were successfully co-located in Los Angeles, California, in October of 2017 to create a combined regional business hub for operations in North America.
