As the world continues to see signs of greater normalcy with people returning to offices, restaurants and outdoor activities, Thai Union Group Public Company Limited (TU) reported solid growth during the third quarter of 2021 on the back of strong sales and continued business diversification.
Sales during the July-September period came in at THB 35.5 billion, an increase of 2.2 percent compared to the same period last year, with the Company’s gross profit growing 1 percent to THB 6.4 billion. Net profit eased 5.8 percent year-on-year to a solid THB 1.9 billion in the third quarter.
Key markets, including Europe and North America, continued to emerge strongly from COVID-19-enforced lockdowns and restrictions during the quarter. In response, customers cut back on stockpiling shelf-stable products such as canned seafood, resulting in a decline in Thai Union’s ambient seafood business, with sales easing 8 percent year-on-year to THB 15 billion.
However, with the impact of the pandemic easing across the globe and more restaurants reopening, especially in the key U.S. market, Thai Union’s frozen and chilled seafood business sales grew 11 percent to THB 14.8 billion. The PetCare, value-added and other products business also showed strong sales growth at THB 5.7 billion, up 11.4 percent year-on-year.
Thai Union’s 3Q2021 performance was also significantly stronger than 3Q2019 – the most recent third quarter not impacted by COVID-19 – when the company reported sales of THB 31.8 billion and gross profit of THB 5.1 billion.
For the nine months to end-September 2021, Thai Union saw total sales of THB 102.5 billion, an increase of 3.6 percent year-on-year, with net profit 27 percent higher at THB 6 billion year-on-year.
“Thai Union delivered a healthy set of financial results for the 9M21, with our core businesses delivering another strong and stable performance. Consumers showed strong trust in our healthy and nutritious products as COVID-19 swept across the world, and I’m proud that they continue to demonstrate their faith in our brands as the pandemic eases. We continue to enhance our portfolio with higher-margin businesses that align with our commitment to ensuring ‘Healthy Living, Healthy Oceans,’” said Thiraphong Chansiri, CEO of TU.
Thai Union’s ongoing focus on diversifying its businesses was a strong factor in the company’s continued growth performance. In September, Thai Union announced a 10 percent strategic investment of about THB 3 billion in R&B Food Supply PCL (RBF), Thailand’s leading food ingredients company specializing in flavors, colors and coating. RBF’s innovative ingredients, such as natural flavors and hemp extracts, can enhance both Thai Union’s core offerings and newer products, including in alternative protein and pet care. In the same month, the Company signed an MOU to launch a new joint venture with Starflex PCL, an industry leader in manufacturing and distributing high quality flexible packaging. The new joint venture will be a crucial part in the Company’s commitment that 100 percent of its branded packaging will be reusable, recyclable or compostable by 2025.
The company’s business strength and competitiveness has also been recognized externally, with Tris Rating giving Thai Union an A+ with upward revision to positive outlook and the Japan Credit Rating Agency giving a rating of A- with a stable outlook. The rating from the Japan Credit Rating Agency – a foreign currency long-term issuer – is equivalent to the sovereign rating of Thailand and reflects Thai Union’s position as a global seafood leader while also recognizing its global business diversification and solid financial performance.
Thai Union continued embracing sustainable Blue Finance in the third quarter, issuing a seven-year sustainability linked bond in Thailand which was 2.23 times oversubscribed, and which followed its issue of sustainability linked loans in Thailand and Japan earlier this year.
“I am proud that Thai Union continues to maintain a healthy financial position and embrace innovation like our Blue Finance strategy. We have a sustainability-linked financing target of 50 percent in 2022,” Chansiri said.
Over the quarter, Thai Union Group subsidiary Songkla Canning Public Company Limited changed its name to i-Tail Corporation Public Company Limited (ITC), which has now become the official business of Thai Union’s increasingly important pet related operations.
While the impact from COVID-19 continued to ease in the third quarter, Thai Union continued to provide humanitarian assistance to local communities. Thai Union donated more than 326,000 servings of food in Thailand between April and August 2021 as part of its global Thai Union Cares program. The donations were made to Thai government agencies, non-government organizations, hospitals and foundations.
Globally, the Thai Union Cares program has donated more than 3.3 million servings of food, along with more than 78,000 cans of Bellotta and Marvo cat and dog food and over 4,000 kilograms of hard dog food to animal charities, pet shelters, community organizations and animal volunteers.