Thai Union has published its Q1 results, which showed a drop in sales and profits, although the company has a striking increase in its Red Lobster business, which seems to show that the recovery plan for the U.S.-based seafood chain is working.
Thai Union data would thus show that the company had a Q1 net profit of THB 1 billion (EUR 26,63 million/ USD 29,4 million), a figure that represents a 41.5% decrease from the same period last year.
"We expect the first quarter to be the softest period of this year, as a result of a high sales baseline from the first quarter of 2022 together with high inventory level at our customers, and logistic normalization," said Thiraphong Chansiri, the CEO of Thai Union Group.
Furthermore, the company also reported Q1 sales of THB 32.7 billion (EUR 877,1 million /USD 966,3 million), a decrease of 10% compared to last year. As anticipated by the company, this decline was due to inventory and rising raw material prices. On the one hand, demand for its products declined in all markets, due to the high inventory levels of its customers, which reduced their orders. On the other hand, high raw material prices caused a slowdown in purchases. Despite this, Thai Union expects a comeback in demand as customers' inventories are gradually being depleted.
"However, we remain optimistic about 2023 growth as we have already seen signs of improvement in the second quarter and expect normalization in the latter half of the year as the trend towards the consumption of seafood and healthier proteins continues to rise globally," said Chansiri.
Although the numbers are down, the group is confident in its business model and especially in the brand's new and innovative products. A larger range of products for all types of consumers such as vegan tuna launched by John West in the Netherlands as well as the Red Lobster's frozen retail products, which are available in several physical stores and online in the U.S.
In addition, the company is pursuing more investment projects to keep expanding its business categories. Currently, the company is investing in three new factories in Samut Sakhon and a cold storage plant in Ghana.
Thai Union is one of the world's largest seafood companies, with a presence in more than 50 countries. The company specializes in producing and exporting canned tuna, shrimp, and other seafood products.
In recent years, the company has been focused on sustainability and improving working conditions in the fishing industry. The company has implemented several initiatives to promote responsible fishing practices and reduce its environmental impact.