SET-listed Thai Union Group Plc (TU), the world's biggest exporter of canned and frozen tuna, reported year-on-year dips in net profit and sales as a stronger baht and volatile raw material costs challenged business operations in early 2018.
The company posted a 2% year-on-year decline in second-quarter sales to 34.1 billion baht, citing the impact of the appreciating baht and declining tuna sales.
Excluding the impact of foreign exchange, sales would have been nearly stable at -0.1% year-on-year.
First-half sales totalled 63.84 billion baht, down 3.6% year-on-year, as a result of the baht's appreciation.
Net profit in the second quarter was 1.4 billion baht, down 3.7% year-on-year but up 57.5% quarter-to-quarter.
"The recovery from [this year's first quarter] was driven by an improved operational outlook from more stable raw material prices, prudent foreign exchange management and insurance claims from overseas subsidiaries," TU said in its management discussion and analysis.
"Despite continued pressures from volatile raw material costs and challenging market environments, we increased our gross margin and net profit showed improvement [on a quarterly basis]," said TU chief executive Thiraphong Chansiri. "TU will continue to work harder to weather the industry's volatility as we focus on continued business and product innovation, while growing our geographic diversity."
TU's ambient seafood sales in the second quarter totalled 16.4 billion baht, down 1.6% year-on-year, while sales contributed by the frozen and chilled seafood business fell 2.6% year-on-year to 13.32 billion baht.
PetCare and value-added product sales fell by 1.2% year-on-year to 4.5 billion baht.
Tougher market competition in North America, together with the US dollar's strength, saw sales of ambient, frozen and chilled seafood, particularly shrimp and lobster, decline in value.
Sales in Thailand, China and the Middle East compensated for lower sales in North America.
TU shares closed yesterday on the Stock Exchange of Thailand at 17.40 baht, down 10 satang, in trade worth 172.8 million baht.