Seafood industry/Thai Union

Editorial staff

Thai Union Group Plc (TU), a global seafood leader, reported a net profit of 1.2 billion baht in the first quarter of 2024, a 53.9 % increase from the adjusted net profit of the first quarter of 2023, excluding share of profit and tax benefits from Red Lobster.

The strong result of Thai Union was driven by a robust recovery in demand across the core ambient seafood, PetCare products, and value-added categories.

Improved performances across all businesses helped lift sales by 1.7 % in the first three months of the year to 33.2 billion baht from a year earlier. The Group’s gross profit margin improved to 17.3 %, driven by frozen, PetCare products, and value-added categories.

Thiraphong Chansiri, CEO of Thai Union Group

“Thai Union Group’s focus on our core business of ambient, frozen, and PetCare has been instrumental in returning our business to growth. The group demonstrated great resilience during 2023 when we faced a challenging operating environment, and after seeing initial signs of a recovery in our performance in the final quarter of last year, I’m pleased to see that we have now emerged even stronger,” Thiraphong Chansiri, TU's CEO, said.

In the first quarter, ambient sales grew 12.7 % year-on-year to 17.2 billion baht with volumes rising 12.7 %, resulting in an all-time high sales contribution from the ambient. Stronger demand across all regions, particularly in the Middle East, Europe, and the U.S. drive the growth.

The gross profit margin declined to 16.6 % due to higher raw material prices in the Group’s inventory. PetCare sales increased 13.2 % from a year earlier to 4 billion baht due to higher sales from the premium mix and price adjustment. PetCare delivered a gross profit margin of 25.7 %, the highest level since the second quarter of 2022.

Sales in the value-added category rose by 10.8 % compared to the first quarter of 2023 due to improve product mix and booked a record-high gross profit margin of 29.5 %. The frozen category saw sales decline 17.7 % year-on-year largely as a result of soft demand in the U.S. market and the implementation of the rightsizing strategy.

In terms of geographical diversity, sales in the U.S. and Canada accounted for 38.6 % of the total revenues, followed by 29.6 % from Europe, 10.9 % from Thailand, and 20.9 % from others.

Net profit experienced a strong growth, compared to adjusted net profit of the first quarter of 2023. This was driven by improvements across all business categories, despite reduced foreign exchange gains, lower share of profit, higher financial costs, and increase of the tax expenses.

During the first quarter, the Japan Credit Rating Agency, Ltd. (JCR) raised the Thai Union Group’s foreign currency issuer credit rating from A- to A with a stable outlook. This rating is the same level as the sovereign credit rating of Thailand from JCR.

Since the beginning of 2024, Thai Union announced its third share buyback program, in order to reward shareholders by returning excess capital to them and boost earnings per share. The share repurchase program will not exceed 3.6 billion baht or 200 million shares.

At the end of March 2024, the total cumulative number of shares repurchased was 86 million shares, and Thai Union aims to continue repurchasing the shares in the remaining period of the program.

Thai Union’s commitment to sustainability remained a focus in the first quarter, announcing the Zero Wastewater Discharge Project at its fish plant in Thailand to set a new global benchmark for a seafood factory by achieving 100 percent wastewater recycling.

The Group also launched the Shrimp Decarbonization initiative, developed in collaboration with global environmental organization The Nature Conservancy (TNC) and Ahold Delhaize USA.

The move is aimed to reduce greenhouse gas (GHG) emissions within the shrimp supply chain, while Thai Union Feedmill became the first feedmill in Asia to receive the Aquaculture Stewardship Council (ASC) Feed Standard certificate, setting a new benchmark for sustainable feed production in the region.