Thai Union scored record profits in 2020, despite Red Lobster losses

Bangkok, Thailand-based seafood giant Thai Union earned a record profit last year despite losses from its Red Lobster affiliate, the company said in its Q4 results report, released 22 February.

The company’s net income in the fourth quarter rose 38 percent year-on-year to THB 1.46 billion (USD 48.6 million, EUR 40 million) on the back of strong core business results. The company’s net profit reached THB 6.25 billion (USD 208 million, EUR 17.2 million) last year, an increase of 64 percent from 2019. Thai Union said this is the first time that its net profit has surpassed THB 6 billion (USD 200 million, EUR 164.7 million).

Between October and December 2020, the company saw its quarterly gross profit margin grow by 18 percent, surging 16.1 percent from the fourth quarter of 2019, mainly due to “strong sales and favorable mix in ambient business, resulting in higher overall gross margin.”

Thai Union’s ambient seafood category includes shelf-stable products including tuna, sardines, salmon, mackerel, and herring, which are largely sold through retail channels and sometimes wholesalers.

However, the company’s share of losses from investments in associates in the fourth quarter was THB 189 million (USD 6.3 million, EUR 5.2 million), compared with a loss of THB 66 million (USD 2.2 million, EUR 1.8 million) a year earlier, mostly because affiliate Red Lobster and other players in the U.S. restaurant industry continued to face losses related to the COVID-19 pandemic.

Thai Union’s share of losses from its investment in associates last year widened to THB 527 million (USD 17.5 million, EUR 14.5 million) “largely due to Red Lobster, from lockdown restrictions that limit numbers of operating dining hall and capacity at the restaurants, in contrast to a 2019 share of profit of THB 591 million [USD 19.7 million, EUR 16.2 million],” it said.

Thai Union said its total sales value went up by 1.9 percent year-on-year to THB 33.46 billion (USD 1.1 billion, EUR 919 million) in the fourth quarter, which was supported by the year-on-year increase of 0.8 percent in sales volume.

“The strong sales performance was driven mainly by the ambient seafood business sales growth of 8.8 percent year-on-year, as consumers continued social distancing, increased home cooking, and our operations benefited from promotion push,” Thai Union said.

Its sales value surged by 4.9 percent to THB 132.4 billion (USD 4.4 billion, EUR 3.6 billion) last year as sales volume grew 5.6 percent from 2019.

The company’s average price of skipjack tuna between October and December increased 40.4 percent year-on-year to USD 1,333 (EUR 1,100) per metric ton. The average price of whiteleg shrimp in the quarter also rose by 3.7 percent year-on-year to THB 167 (USD 5.60, EUR 4.60) per kilogram.

Thai Union described its overall response to the pandemic as “prompt and effective,” helping the company achieve record profits.

Photo courtesy of Thai Union