Thai Union announced its 2Q23 financial outcomes recently. The firm encountered a reduction of 12.6% in revenue and a substantial 36.7% decline in net profit during 2Q23, primarily attributed to external influences. Nevertheless, it successfully upheld a consistent gross profit margin of 16.9% and demonstrated enhancements in operating profit and cash flow. Additionally, the company revealed its plan to distribute an interim dividend of THB 0.30 per share (equivalent in EUR 0.0078 /USD 0.0086 per share) to its shareholders.
"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," said Thiraphong Chansiri, CEO of Thai Union.
Thus, this 2Q23 Thai Union's revenue declined, amounting to THB 34.1 billion (EUR 1.65 billion/ USD 1.81 million). These results are attributed to the high baseline and high inventory last year, compounded by normalizing logistics and softer demand.
On the other hand, following the financial outcomes, there was a decline in net profit amounting to THB 1 billion (EUR 48.46 million/ USD 53.21 million). The company attributed this decrease to notable foreign exchange losses and the dilution impact on i-Tail's net profit.
Nevertheless, despite the challenges, the company has achieved commendable results in yields and profit margin, which is a positive development. The company maintained a consistent gross profit margin of 16.9%, even in the face of elevated commodity prices compared to the previous year. Furthermore, Thai Union showcased a noteworthy year-on-year rise in operating profit, marked by an 8.2% increase. The firm also demonstrated robust free cash flow, predominantly propelled by enhancements in net working capital.
In particular, the organic seafood business saw a 1.3% increase in sales compared to 2Q22. This increase is attributed to higher selling prices and promotional activities, especially in the European Union market.
In this regard, one of the company's highlights is its efforts to introduce new products. In addition, these innovations have considered new approaches, variety, diversity, health, and wellness as a priority. A formula that has achieved success.
Among them, Red Lobster is noteworthy. Performance improved in 2Q23 due to the recovery strategies implemented by the company. Compared to 2Q22, the company decreased operating losses.
Finally, Chansiri explained that the company would continue improving its plans, although they are optimistic. "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 SeaChange® 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."
Thai Union Group PCL is a world-leading seafood producer, offering high-quality and innovative seafood products globally for 46 years. The company, with a global workforce of over 44,000, focuses on sustainability and earns recognition. With its SeaChange® strategy and inclusion, the company is in the Dow Jones Sustainability Indices and FTSE4Good Emerging Index.