TU posts 14.6% profit surge as 2017 sales hit record high

TU posts 14.6% profit surge as 2017 sales hit record high

Mr Thiraphong says price pressures for raw materials are easing.
Mr Thiraphong says price pressures for raw materials are easing.

SET-listed Thai Union Group (TU), the world's biggest canned and frozen tuna exporter, Tuesday reported a fiscal 2017 net profit of 6 billion baht, up 14.6%, propelled by record-high sales.

Annual consolidated sales reached 136.53 billion baht, up 1.6%, TU said.

Gross profit was 18.14 billion baht, while gross profit margin stood at 13.3%, up from 14.8% for fiscal 2016.

High tuna prices contributed to the weaker margin, which was partly offset by the company's prudent foreign exchange management and stringent cost control.

"Despite market volatility and higher raw material prices, our profitability remained resilient in 2017," said chief executive Thiraphong Chansiri. "Raw material price pressures are relaxing as tuna prices have started to decline since the fourth quarter of 2017."

For 2017, sales in North America continued to play an important role in the company's revenue, accounting for 40% of total sales, while Europe contributed 32%.

Thailand's domestic market grew to 10% of total sales, with Japan contributing 6%.

Last year's sales contribution from major markets marginally had shifted in favour of domestic and emerging markets partly due to the company's strong penetration efforts in emerging markets, particularly China.

For fiscal 2017, the sales contribution from TU brands rose slightly to 42%, with the balance coming from private label sales.

Ambient sales were stable at 61.14 billion baht, while sales of frozen and chilled seafood business climbed 2.7% year-on-year to 57.31 billion.

Pet care and value-added sales rose to 18.1 billion baht, an increase of 3.5% year-on-year.

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

The company reported foreign exchange gains of 1.3 billion baht last year, up from 84 million recorded in 2016, mainly due to both realised and market-to-market foreign exchange gains recorded as a result of the continuous baht appreciation against key trading currencies.

Year-end net debt-to-equity ratio stood at 1.38 times, unchanged from that of 2016 due to high raw material prices.

Thai Union is regarded as the world's largest producer of shelf-stable tuna products with annual sales exceeding 135 billion baht.

The company's global brand portfolio includes international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar and Ruegen Fisch.

TU shares closed yesterday on the Stock Exchange of Thailand at 20.40 baht, up 50 satang, in trade worth 230.1 million baht.

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