Thai Union Group 2017 Sales Hit Record High

Thai Union Group PCL reported a 1.6 percent year-on-year rise for FY2017 consolidated sales to a record THB 136.53 billion. 
 
Gross profit was THB 18.14 billion, while the gross profit margin stood at 13.3 percent, compared to 14.8 percent for FY2016. High tuna prices contributed to the weaker margin, which was partly offset by prudent foreign exchange management and stringent cost controls with FY2017 Selling, General & Administration to sales ratio coming in at 9.8 percent, below the full year target of 10 percent. As a result, FY2017 net profit surged 14.6 percent year-on-year to a record THB 6.02 billion.

Thai Union announced a final dividend of THB 0.34 per share, making a 2017 full year dividend of THB 0.66 per share, representing a 5% dividend payout growth from 2016 despite strong operational headwinds.

For 2017, sales in North America continued to play an important role in the company’s revenue, accounting for 40 percent of total sales, while Europe contributed 32 percent. Thailand’s domestic market grew to 10 percent of total sales, with Japan contributing six percent. The sales contribution from major markets marginally shifted in favor of domestic and emerging markets partly due to strong penetration efforts in emerging markets, particularly China.

“Despite market volatility and higher raw material prices, our profitability remained resilent in 2017,” said Thiraphong Chansiri, CEO of Thai Union.

“Raw material price pressures are relaxing as tuna prices started to decline since the fourth quarter of 2017.”

The FY2017 sales contribution from Thai Union brands rose slightly to 42 percent, with the balance coming from private label sales. Ambient sales were stable at THB 61.14 billion. FY2017 sales for the frozen and chilled seafood business climbed 2.7 percent year-on-year to THB 57.31 billion. PetCare and value-added sales rose to THB 18.07 billion, an increase of 3.5 percent over FY2016.

The increase in company sales value was driven by continued organic growth and increased contribution from Red Lobster in the US.

Thai Union’s Chicken of the Sea International and Chicken of the Sea Frozen Foods were successfully co-located in Los Angeles in October last year to create a combined regional business hub for the operations in North America.

Last year, Thai Union celebrated its 40th Anniversary in late November with an exhibition showcasing key sustainable development and innovation initiatives positioned at the heart of company’s business as well as its future.

At the exhibition, two new innovative products, yellowfin tuna slices and healthy alternative tuna sausage, were introduced. The two products were successfully innovated at the company’s Global Innovation Incubator.

Thai Union, Mars Petcare and Inmarsat recently debuted a short film documenting how an innovative digital traceability pilot program in Thailand, which the three companies have implemented alongside a coalition of industry and government groups, has helped to boost human rights in the seafood industry.

In December, the company also introduced its Fishing Vessel Improvement Program and Vessel Code of Conduct to provide clear guidance to fishing vessels from which it sources as well as improve labor and ethical performance in the fishing sector.

Thai Union was honored extensively in 2017 for its sustainability efforts. The company was named to the Dow Jones Sustainability Index (DJSI) Emerging Markets for the fourth straight year, in addition to being named to the FTSE4Good Emerging Index for a second year. Thai Union was also listed in the Stock Exchange of Thailand’s (SET) 2017 Thailand Sustainability Investment Index and received the SET 2017 Outstanding Sustainability Award.

Additionally, Thai Union was named one of the Asia Corporate Excellence & Sustainability Awards winners for Top Corporate Social Responsibility Advocates and winner of the 2017 SEAL Business Sustainability Awards for Organizational Impact—the SEAL (Sustainability, Environmental Achievement and Leadership) Awards recognizes organizations and leaders dedicated to making real progress on sustainable development and environmental issues.

Dr. Darian McBain, Thai Union’s global director for sustainable development, was recently named Sustainability Leader of the Year at the prestigious edie Sustainability Leaders Awards. 

And the company was “highly commended” for Sustainability Report of the Year and Sustainability Leader of the Year at the Ethical Corporation’s Eighth Annual Responsible Business Awards in 2017, as well as “highly commended” at the recent Asia Sustainability Reporting Awards for Online Sustainability Reporting and Best Supply Chain Reporting.

Further, Thai Union’s Global Innovation Incubator won a 2017 International Innovation Award from Enterprise Asia for its innovative yellow fin tuna slices. 

“I am incredibly proud that Thai Union’s efforts have been acknowledged with numerous awards. These successes embody how Thai Union is working every day to ensure the company values we embrace are being translated into real and demonstrable change for good,” said Chansiri.

Looking ahead, Thai Union will continue to make progress and maintain its focus on collaboration to address sustainability challenges confronting the global seafood industry. This includes digital traceability, providing worker connectivity at sea, educating children and providing nutritional information to local communities. 

“We are also working across industries because the challenges faced by the seafood industry, such as human rights and safe migration, are not unique to seafood,” he added.