Thai Union Group Public Company Limited (SET: TU) reported its third quarter earnings for the period ended September 30, 2023, booking sales of THB 34 billion, a slight drop of 0.9 percent from the previous quarter. The Company saw its net profit grow 17.2 percent quarter-on-quarter to THB 1.2 billion, while the gross profit improved 8.4 percent to THB 6.2 billion, mainly driven by less pressure from key raw material prices, portfolio rationalization and the implementation of profit protection plan measures.
Quarterly sales continued to ease from last year’s extraordinary high baseline, declining 16.8 percent year-on-year. This also weighed on the net profit for the quarter, which was down 52.3 percent from a year earlier, also impacted by foreign exchange losses and the continued dilution effect on i-Tail’s net profit. However, the gross profit margin in the third quarter was solid at 18.4 percent.
“Thai Union continued to successfully improve its profitability and delivered another strong quarterly gross profit margin, the second highest ever performance, across all business categories. This is proof positive that the implementation of the profit protection plan across all our operations is being effective,” said Thiraphong Chansiri, CEO at Thai Union Group, “We continue to focus on strategies to strengthen our profitability. Overall, our financials remain strong, which was reinforced by TRIS Rating, which affirmed our company rating and the ratings on our senior unsecured debentures at A+.”
Frozen and chilled seafood business sales increased by 0.9 percent quarter-on-quarter to THB 11.6 billion. The gross profit margin in this category continued its impressive recovery, rising from 9.6 percent in the second quarter of this year to 12.9 percent in the third quarter. This was largely due to strong inventory management along with the success of the Company’s rightsizing strategy to discontinue nonprofitable product categories. Meanwhile, the value-added business’ sales grew 19.4 percent to THB 2.7 billion quarter-on-quarter, with a healthy gross profit margin at 28.9 percent, thanks to the Company’s focus on higher margin products.
The PetCare business also continued to recover, with quarterly sales increasing 19.1 percent to THB 3.8 billion and the gross profit margin standing at 19.4 percent as the U.S. and Europe markets saw customers resume restocking products while selling prices were also higher. Sales for the ambient seafood business decreased by 7.5 percent from the previous quarter to THB 15.9 billion, however, its gross profit margin was solid at 20.4 percent.
Sustainability remained a key focus for Thai Union during the third quarter, with the Company announcing SeaChange® 2030, marking the expansion of its sustainability strategy first created in 2016 to incorporate 11 more ambitious, interconnected goals covering both aspects of people and planet, as part of the Company’s ongoing commitment to “Healthy Living, Healthy Oceans.” The refreshed sustainability strategy includes a goal to reduce the greenhouse gas emissions by 42 percent by 2030 and drop to net zero by 2050.
“Amid challenges and the uncertain global economic climate, Thai Union believes that our focus and strength in sustainability and innovation will keep driving us forward. We firmly believe that, together, sustainability and innovation will create new opportunities for our business to grow and emerge stronger than ever,” added Chansiri.
