Thai Union Group Public Company Limited (SET: TU) on Monday reported its second quarter financial results ended June 30, 2023. Revenue for the quarter decreased 12.6 percent year-on-year to THB 34.1 billion, due to last year’s high baseline, high inventory levels among customers, logistics normalization, and overall softer demand. Net profit declined 36.7 percent to THB 1.0 billion, mainly because of significant foreign exchange losses and the dilution effect on i-Tail’s net profit.
However, Thai Union recorded a gross profit margin at 16.9 percent stable from last year despite higher raw material prices. The Company also delivered an operating profit of THB 1.8 billion, an 8.2 percent rise year-on-year. Free cash flow was solid at THB 3.3 billion, mainly driven by improvements in net working capital.
With the core performance improving, the Company declared an interim dividend of THB 0.30 per share, which will be paid to shareholders on 4 September, 2023 with an ex-dividend date on 21 August, 2023 and record date as of 22 August, 2023.
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 percent of our net profit.”
Sales are usually higher during the second quarter due to seasonal factors, and this was reflected in the Company’s earnings for 2Q23 with sales rising 4.3 percent quarter-on-quarter to THB 34.1 billion. Net profit increased by 0.7 percent for the period from the bottom of the first quarter. There was improved momentum during the second quarter with the gross profit growing by 16.9 percent from the previous quarter to THB 5.7 billion.
Ambient seafood business sales returned to growth in the second quarter, rising 1.3 percent year-on-year to THB 17.1 billion, their highest quarterly sales level in the past nine years, thanks to higher selling prices and promotional activities, especially in the EU market. The Company’s branded products continue to offer new, innovative products, focusing on variety, diversity, health and wellness.
Red Lobster’s performance also improved in the second quarter as the Company’s turnaround strategies continued to have a positive impact, booking a THB 94 million share of loss from operations compared to that of THB 281 million in the same period in 2022.
“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 SeaChangeâ 2030, our sustainability strategy which we are dedicating USD 200 million between now and 2030 to reshape the seafood industry with a focus on people and planet,” added Chansiri.