Seafood giant Thai Union Group has reported a gross profit margin of 13.8% amounting to THB 4.7 billion (€122 million) in the second quarter of its financial year after a historic low of 11.3% in Q1.
However, the company whose brands include John West, King Oscar, Chicken Of The Sea, reported a 2% year-on-year decline in 2018 second-quarter sales of THB 34.1 billion(€885 million).
The volatility in the market is a result of declining tuna sales, high-priced raw materials, and appreciation of the Thai Baht.
The company's ambient seafood sales in Q2 amounted to THB 16.4 billion (€426 million), down 1.6 % year-on-year.
Sales from Thai Union's frozen and chilled seafood business fell by 2.6% year-on-year to THB 13.3 (€345 million) billion.
Tough Competition In North America
Depreciation of the US dollar, coupled with tough competition in North America, resulted in reduced sales of ambient, frozen and chilled seafood.
North America contributed 38% of total sales in the first half of the year, followed by Europe with 32%. Sales in Thai local markets amounted to 10% of the total.
Markets in Thailand, China and the Middle East continued to grow as Thai Union launched new products and implemented strong marketing and sales efforts.
Strong Financial Management
Thai Union Group's efficient capital management and improved operational EBITDA in Q2 helped the company maintain a strong operational cash flow amounting to THB 7.5 billion (€195 million).
The company also stabilised its net debt to equity ratio in this quarter by paying out dividends in April, investing in Russia and Thailand, and involving itself in capex projects.
In June of this year, Thai Union acquired a stake in retail management service provider, Thammachart Seafood Retail Company Ltd.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
