Seafood giant Thai Union has reported net profit of THB 1.0 billion (€26 million) in the second quarter of its financial year, down 36.7% year on year, due to foreign exchange losses and the dilution effect on i-Tail’s net profit.
Revenue for the quarter decreased 12.6% year-on-year to THB 34.1 billion (€890 million), due to last year’s high baseline, high inventory levels among customers, logistics normalisation, and overall softer demand, the company added.
However, Thai Union's gross profit margin remained stable at 16.9% compared to last year, despite higher raw material prices.
The John West maker saw operating profit rise 8.2% year-on-year during the quarter, to THB 1.8 billion (€47 million).
'Early Signs Of A Recovery'
Thiraphong Chansiri, CEO at Thai Union, said, "The first half of 2023 has not been easy, but we are starting to see early signs of a recovery in various markets the latter half of 2023.
"Moreover, our balance sheet is still strong, with net debt to equity ratio at 0.64 times in the second quarter, well below our target of 1.0x times. We have a healthy dividend payout rate of 70.3% of our net profit."
On a quarter-on-quarter basis, sales increased by 4.3% to THB 34.1 billion (€890 million), while net profit increased by 0.7% from the bottom of the first quarter.
It has declared an interim dividend of THB 0.30 per share, to be paid to shareholders on 4 September 2023.
Divisional Performance
The company's ambient seafood business returned to growth in the second quarter, with sales rising 1.3% year on year to THB 17.1 billion (€450 million) – its highest quarterly sales in the past nine years.
The company attributed this growth to higher selling prices and promotional activities, especially in the EU market.
Thai Union continued to offer new, innovative products, focusing on variety, diversity, health and wellness across its branded portfolio.
Elsewhere, its Red Lobster business saw an improvement in performance in the second quarter, as its turnaround strategies continued to have a positive impact.
Outlook
Chansiri added, "Looking ahead to the remainder of 2023, Thai Union will reinforce its profit protection plan measures globally to improve profitability, targeting cost savings and greater cost efficiencies in all operations.
"We remain optimistic about the longer-term outlook. We’re also excited about maintaining our position as a sustainability leader in the global seafood industry following the recent launch of SeaChange 2030, our sustainability strategy, to which we are dedicating $200 million (€181.4 million) between now and 2030 to reshape the seafood industry with a focus on people and planet."
