Thai Union sees solid second quarter growth on the back of its successful business diversification strategy

Results underpinned by a return to pre-pandemic activities in some core markets

A return to some pre-pandemic activities as a result of increased COVID vaccinations and other measures in the US and European markets, along with effective business diversification, helped underpin Thai Union’s solid business growth in the second quarter of this year.

In the second quarter of 2021, the company posted sales of THB 35.9 billion, up 8.6 percent from the same time period last year. Thai Union reported a record net profit of THB 2.3 billion, climbing 36.5 percent compared to the same period last year, with a gross profit margin of 19 percent.

During the second quarter there was a move back to some pre-pandemic activities, such as family gatherings, celebratory events and dining out, in the US in particular as well as in parts of Europe. As a result, Thai Union’s food service and retail businesses in the US saw a rebound, helping lift the company’s frozen and chilled seafood business to THB 14.9 billion year-on-year in the second quarter of this year, a 28.7 percent increase compared to Q2 in 2020 when the effects of the pandemic had a strong adverse effect on the restaurant sector. The company also benefitted from strong improvement at Red Lobster, the largest global seafood restaurant chain, over the quarter.

Thai Union continued focusing on high-margin businesses, and the favorable results were buoyed by ongoing strong demand for PetCare, value-added, including the packaging business, and other products as people continued to adopt pets and spend more time at home, feeding and taking care of them, with sales growth of 12.5 percent to THB 5.7 billion.

The return to pre-Covid activities in some markets in the second quarter following the exceptional demand experienced when COVID-19 first emerged last year, resulted in a sales decline of 6.8 percent in the company’s ambient seafood business to THB 15.3 million in 2Q2020.

Looking at the first half of 2021, sales grew 4.4 percent to THB 67 billion, with net profit rising 51.7 percent to THB 4.1 billion on the back of continued trust in Thai Union products across the globe. The company also declared an interim dividend payment of THB 0.45 per share.

“The diversification in our business in terms of geographical markets, product categories and source of revenues is a key contributor to our strong performance in this quarter, and we continue to focus on profitability, financial disciplines and new, value-enhancing businesses,” said Thiraphong Chansiri, CEO at Thai Union Group. “While demand in our ambient business returned to more normalized levels, our frozen and chilled seafood business recovered strongly on the back of the return to pre-COVID activities in certain core markets. I am proud that consumer trust in the quality, value and nutritional benefits of Thai Union’s products to remain part of their commitment to healthy living, whether while they are staying at home or returning to a more normalized lifestyle.”

In May, the company also acquired the remaining 49 percent of shares of Rügen Fisch AG headquartered in north-eastern Germany, and which currently generates revenues in excess of €140 million as the country’s shelf-stable seafood leader.

In the first half of 2021, Thai Union continued its strategy of investing in new and innovative businesses and start-ups, including in ViAqua, a biotechnology company focused on disease prevention for aquaculture, BlueNalu, a company developing cell-cultivated seafood; and Aleph Farms, a company developing cell-cultivated meat.

“We want to give our customers as many options as possible to help them make choices that enable healthy living and support healthy oceans. We are seeing young consumers across the globe increasingly introduce more plant-based foods into their diets, while still eating fish and meat. Alternative proteins produce less carbon and is an important part of our diets globally and therefore to Thai Union’s business,” Chansiri said.

As a result of the pandemic continuing in the first half of 2021, Thai Union continued to support those communities – both human and animal – where it operates across the globe, but especially in Thailand which is in the midst of the third wave of the virus. Under its ‘Thai Union Cares’ program, the company has donated more than 200,000 servings of human food in Thailand since the start of the third wave and more than 400,000 servings of human food in Thailand since last year. Globally, Thai Union has donated more than 3.3 million servings of food since the start of the pandemic. More than 75,000 cans of Bellota cat food and Marvo dog food have also been donated this year to animal shelters, community organizations and volunteers across Thailand so they can continue feeding those animals most in need.

Thai Union continues to partner with government agencies, hospitals and humanitarian relief organizations to provide other much needed supplies, including more than 20 high flow heated oxygen respirators and 10,000 COVID-19 Antigen Rapid Tests, totaling worth of THB 7.2 million, to a hospital in, and the city of, Samut Sakhon—the location of its largest manufacturing operations.

In the second quarter of this year Thai Union published its eighth annual Sustainability Report, detailing the positive change it continues to drive across the global seafood industry despite the significant challenges presented by the COVID-19 pandemic. Among the report’s highlights were the Company becoming the first food producer and Thailand-listed company to join EP100, a Climate Group global initiative on smarter energy use; exceeding its targets for water consumption reduction and waste to landfill reduction; and partnering with likeminded organizations, including NGOs, civil society and other companies, to find the best path to achieve its goals.

As sustainability remains central to Thai Union’s operations and business philosophy, the company has continued to expand its Blue Financing initiatives—financing for projects benefiting oceans. These began with the launch of Thai Union’s inaugural Sustainability-Linked Loan (SLL) of THB 12 billion equivalent in February this year, followed in July by the successful pricing of its THB 5 billion seven-year senior, unsecured Sustainability-Linked Bond (SLB) for institutional investors.

“While we remain optimistic about the outlook for the second half of this year and our ability to continue to grow strongly, we need to remain extremely vigilant as these are uncertain and unpredictable times and many challenges remain,” Chansiri concluded.

About Thai Union Group
Thai Union Group PCL is the world’s seafood leader, bringing high quality, healthy, tasty and innovative seafood products to customers across the world for more than 40 years.

Today, Thai Union is regarded as one of the world’s leading seafood producers and is one of the largest producers of shelf-stable tuna products with annual sales exceeding THB 132.4 billion (US$ 4.2 billion) and a global workforce of more than 44,000 people who are dedicated to pioneering sustainable, innovative seafood products.

The company’s global brand portfolio includes market-leading international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar, and Rügen Fisch, Thai-leading brands SEALECT, Fisho, Qfresh, Monori, Bellotta and Marvo, and ingredient and supplement brands UniQ™BONE, UniQ™DHA and ZEAvita.

As a company committed to innovation and globally responsible behavior, Thai Union is proud to be a member of the United Nations Global Compact, and a founding member of the International Seafood Sustainability Foundation (ISSF). In 2015, Thai Union introduced its SeaChange® sustainability strategy. Find out more at Thai Union’s on-going work on sustainability issues was recognized when the company was listed on the Dow Jones Sustainability Indices (DJSI) for the seventh consecutive year in 2020, and ranked number two in the world on the Food Products Industry Index. Thai Union was also named to the FTSE4Good Emerging Index for the fifth straight year in 2020.

Source: Thai Union Group

Symbol: TU