- Thai Union booked a full-year normalized net profit of THB 4.5 billion
- Solid recovery seen in Q4, with 17.8 percent gross profit margin
- Strong net-debt-to-equity ratio of 0.78x, after non-cash impairment of minority investment in Red Lobster
- Bondholders approved one-time waiver to exclude impairment from 2023 net income covenant calculation
- Thai Union delivered full-year dividend of THB 0.54 per share
- Soon announce Strategy 2030, with sharpened focus on core business to drive long-term growth
Thai Union Group PCL (SET: TU) 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 Group 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 strong resilience amid strong 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 (USD 527 million) during the fourth quarter after announcing its intention to pursue an exit of its minority investment in Red Lobster. 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 also 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 U.S. 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 Thai Union operates, and an ongoing cost-of-living crisis which has impacted consumers’ spending power,” said Thai Union Group CEO Thiraphong Chansiri. “Despite these headwinds, Thai Union 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.”
For full year sales, ambient seafood accounted for 47 percent of total revenues, followed by frozen and chilled seafood with 35 percent, PetCare with 11 percent and value-added and other businesses with 7 percent. In terms of geographical diversity, sales in the U.S. and Canada accounted for 41 percent of total revenues, followed by 30 percent from Europe, 11 percent from Thailand and 18 percent from others. Thai Union delivered a second half-year dividend of THB 0.24 per share, bringing the full-year dividend to THB 0.54 per share.
Thai Union was listed on the 2023 Dow Jones Sustainability Indices for the 10th consecutive year during the fourth quarter, positive recognition of the Company’s unwavering commitment to sustainable and responsible business practices. The Company was also ranked number one on the Seafood Stewardship Index (SSI) for the third consecutive time in recognition of its leadership in driving positive change and delivering towards the United Nations Sustainable Development Goals (UN SDGs).
Thai Union also announced the closure of a THB 11,485 million Sustainability-Linked financing package, marking the commencement of the second phase of Thai Union’s Blue Finance agenda, with a target of increasing sustainability-linked finance to 75 percent of their long-term financing by 2025.
As part of the Group’s efforts to drive long-term growth it has announced its Strategy 2030, underpinned by a purpose of “Healthy Living, Healthy Oceans,” creating a sustainable and healthier future for humans, pets and the planet. Thai Union Group aims to lead the global marine industry while driving superior shareholder returns, building a diversified marine-focused portfolio beyond seafood, with a commitment to shape the future of nutrition for humans and pets.
“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,” added Chansiri.
