Thai Union’s Q3 2022 sales, net profit set record

Thai Union posted all-time highs for quarterly sales and net profit in the third quarter of 2022, mainly due to the better performance of its core businesses and its pet care and value-added operations.

Thai Union’s sales between July and September surged 14.7 percent year-on-year to THB 40.76 billion (USD 1.08 billion, EUR 1.09 billion) on higher selling prices, rising sales volumes, and favorable foreign exchange, the company said in its Q3 results, released 2 November.

Thai Union’s sales of ambient seafood broke a company record, hitting THB 17 billion (USD 452.4 million, EUR 457 million) in the quarter – up 13.6 percent year-on-year driven by the combination of higher prices, better demand in Asia and the U.S., and favorable foreign exchange rates. Thai Union’s ambient seafood category, including tuna, sardine, salmon, mackerel, and herring, mainly refers to shelf-stable items that are largely sold through retail channels and sometimes wholesalers. 

The company said it was able to mitigate rising inflation through negotiation of prices with customers, hedging of major materials, and effective inventory management.

Thai Union’s sales of pet care and value-added products jumped 55.9 percent to THB 8.95 billion (USD 238 million, EUR 240.6 million), which the company attributed to “continued strong demand, low baseline comparison after last year’s temporary factory closure during the pandemic, higher selling prices, higher volumes to support customer’s marketing activities, and favorable foreign exchange.”

Thai Union’s Q3 net profit also hit an all-time high of THB 2.53 billion (USD 67.3 million, EUR 68 million), up 30.7 percent year-over-year off of strong operating profits earned from higher sales volumes, favorable foreign exchange rates, and a healthy category mix, the company said.

“Our third-quarter performance reflects our continued push for greater business diversification, innovation, and a laser focus on cost efficiency,” Thai Union CEO Thiraphong Chansiri said. “Despite the ongoing global economic challenges, we have demonstrated that the emphasis on strengthening our core businesses and expanding into new innovative products can yield results in a period of strong headwinds.”

The company continued to suffer losses from Red Lobster, with the losses attributed to its stake in the restaurant chain reaching  THB 456 million (USD 12.1 million, EUR 12.2 million) in the quarter, much higher than the THB 171 million (USD 4.5 million, EUR 4.6 million) loss it took in the same period of 2021. 

In the first nine months of 2022, Thai Union’s sales grew 13.1 percent year-on-year to THB 116 billion (USD 3.09 billion, EUR 3.11 billion), with its sales of ambient seafood rising 13 percent, and its sales of pet care and value-added products increasing 42 percent compared to a year ago. But its net profit went down 3 percent year-on-year to THB 5.9 billion (USD 157 million, EUR 158.6 million) over January-September.

Thai Union paid an average of NOK 73 (USD 7.06, EUR 7.13) per kilogram of salmon in Q3, 26.3 percent higher year-on-year, and paid an average of USD 1,667 (EUR 1,684) per metric ton of tuna, up 19 percent year-on-year. It paid an average of THB 157 (USD 4.17, EUR 4.21) per kilogram of whiteleg shrimp rate in the quarter, up 22.6 percent year-on-year.

According to Thai Union, high inflation rates in its key markets have resulted in its overall cost of seafood raw materials, utilities, packaging, ingredients rising 14.4 percent year-on-year in the through 2022. The company’s logistics costs in the period, however, fell 20.9 percent year-on-year to THB 370 million (USD 9.8 million, EUR 9.9 million) due to the softening of global freight rates.

The company said it has begun building three new factories since the middle of 2021, including a new cold storage project for tuna products in Ghana; a culinary plant for new, ready-to-eat production in Samut Sakhon, Thailand; and a protein hydrolysate and collagen peptide plant for ingredients business in Samut Sakhon. It is also expanding the capacity of its Samut Sakhon factory to produce larger quantities of wet pet food and pet treats. Each of these projects is expected to come online in 2023.

“At Thai Union, our strategy for business diversification covers not just our product portfolio but also geographical markets. Our global business teams are working across all our markets around the world to ensure that we will continue to grow and deliver healthy products to consumers while also supporting our goal of ‘healthy living, healthy oceans,’” Chansiri said.

Photo courtesy of Thai Union