Thai Union Group PCL proudly reported a triumphant second quarter, unveiling a net profit of THB 1.2 billion, marking a significant 14.2 percent uplift compared to the same period last year. This leap was predominantly driven by a robust recovery in their Ambient, PetCare, and Value-added segments.
The April-June period witnessed a continuous upward sales momentum, registering a 3.6 percent increase year-on-year, reaching THB 35.3 billion. The Group’s gross profit margin held strong at 18.5 percent— its second-highest ever—touted on account of PetCare’s high-margin products, advancements in the Value-added category, and strategic adjustments within the Frozen category by Q2 2024. Financial health was further underscored with a net interest-bearing debt to equity ratio steady at 0.82x.
Buoyed by solid core performance, the company jubilantly announced an interim dividend of THB 0.31 per share for the first half of 2024, maintaining a dividend payout ratio of 59 percent.
“The unwavering recovery of our Ambient, PetCare, and Value-added lines bore fruit in a commendable second-quarter performance,” stated Thiraphong Chansiri, CEO of Thai Union Group. “We bask in the momentum carried over from Q1, and after navigating the hurdles of 2023, I’m certain we’re steering towards a trajectory of sustainable growth.”
The Ambient segment showcased a 1.4 percent year-on-year growth, pushing sales to THB 17.4 billion, largely driven by escalating demand in the U.S., Canada, and the Middle East. With low raw material prices and surging tuna prices, the gross profit margin in this category ascended to 18.9 percent. PetCare soared with a staggering 40.6 percent sales surge, landing at THB 4.5 billion, fueled by premium product sales and revived demand in Europe and the U.S., making the gross profit margin hit an all-time high of 31.3 percent by Q2 2024.
The Value-added segment flourished with a 15.5 percent upswing in sales to THB 2.6 billion and a gross profit margin stabilized at 26.5 percent. However, the Frozen segment stumbled with a year-on-year decline of 5.7 percent, dropping sales to THB 10.8 billion, due to lukewarm demand in the U.S. Nevertheless, it witnessed a gross profit margin rebound to 10.7 percent, thanks to falling raw material prices and ongoing feed business improvements.
Thai Union Group demonstrated its global footprint in Q2 2024, with 40.0 percent of sales stemming from the U.S. and Canada, followed by 32.3 percent from Europe, 10.3 percent from Thailand, and 17.3 percent from other regions.
The company executed a successful share buyback program in H1 2024, repurchasing 200 million shares and reducing its registered capital by the same amount effective July 25, 2024.
In a notable milestone, i-Tail Corporation was listed in the SET50 Index of the Stock Exchange of Thailand for the first time since its IPO in December 2022, making it the only newcomer from the Food & Beverage sector.
Innovation stands at the fore of Thai Union’s growth strategy. In the UK, John West rolled out ECOTWIST®, a groundbreaking packaging solution championing ease of use, sustainability, and reduced waste. Positioned as the most significant packaging innovation in the UK’s ambient tuna market in two decades, ECOTWIST® is poised to propel market differentiation.
Sustainability marks Thai Union’s enduring commitment. On World Oceans Day, employees partook in clean-up activities across Thailand, the U.S., Africa, and Europe. Thai Union earned its place on the FTSE4Good Emerging Index for the ninth year and published the 2023 Sustainability Report, spotlighting milestones towards the SeaChange® 2030 strategy.
“Thai Union remains unwavering in its quest for growth, innovation, and sustainability. With Strategy 2030 at our helm, I’m confident we are steering towards not just long-term growth but also realizing our vision to be the top marine health and nutrition company globally,” beamed Thiraphong Chansiri.
Wow, a 14.2% profit increase is impressive! Thai Union must be doing something right.
Definitely, especially with their focus on sustainability and innovative packaging like ECOTWIST®. It’s great to see a company balance profit and environmental responsibility.
Sure, but let’s not forget they’re still a massive corporation. How much of this ‘sustainability’ talk is actually greenwashing?
Reading about the environmental initiatives, I’m inclined to believe they take it seriously. They’ve been on the FTSE4Good Emerging Index for nine years straight.
Good point, Davis. Being consistent on that index is no small feat. We should give credit where it’s due.
Their reliance on the US and Canada for 40% of sales seems risky. What if those markets decline?
Every big company diversifies its market risks. They have significant shares in Europe and other regions too.
True, but it’s still a huge chunk that could affect them drastically if something goes wrong.
PetCare seeing a 40.6% sales surge is insane! Is pet ownership really growing that much?
Pet ownership has absolutely boomed, especially during the pandemic. People are spending more on premium pet products too.
That makes sense. Pets have become family members, and people want the best for them.
The share buyback program shows confidence in their future. Reducing the number of shares can also be rewarding for existing shareholders.
Or it could just be a ploy to artificially inflate share prices without real growth. Seen it happen too many times.
Possibly, but I think their financials show real growth this time. 1.2 billion THB net profit isn’t just smoke and mirrors.
Love how they engage in clean-up activities worldwide. Companies should contribute more to sustainability.
Agreed! It shows they’re not only focused on profitability but also on giving back to the community.
The Frozen segment’s decline is worrying. Why is demand in the US so lukewarm?
Could be due to shifting consumer preferences. People might be moving towards fresh or plant-based products more.
Yeah, or maybe the market there is just oversaturated. It’s a tough segment to be in.
John West’s ECOTWIST® sounds revolutionary. Any info on how it’s being received by consumers?
No concrete numbers yet, but early buzz seems positive. Consumers are increasingly looking for sustainable options.
Hope it catches on. The packaging industry needs more eco-friendly solutions like this.
How is Thai Union managing to keep a high gross profit margin despite some segments declining?
It seems like their improvements in Value-added and PetCare are compensating for the decline in Frozen.
That makes sense. Diversification within their segments must be key to their stability.
Holding a debt to equity ratio at 0.82x is solid. Shows they’re managing their financials well.
It’s inspiring to see their commitment to the SeaChange® 2030 strategy. We need more companies thinking long-term like this.
The interim dividend of THB 0.31 per share is pretty generous. Investors must be pleased.
Wasn’t much of a dividend when you think about it. They could have done better given their profits.
You might be right, but maintaining a 59% payout ratio means they’re still investing back into the company. Balance is key.
I’m curious about their strategic adjustments in the Frozen category. Any specifics on what they’re doing?
They mentioned ongoing feed business improvements and falling raw material prices. Probably optimizing operations on both ends.
Got it. Thanks for clarifying, Evan.
It’s great they’ve been listed in the SET50 Index. Shows the market has confidence in them.
With such strong Q2 results, what are their plans for the rest of 2024 and beyond?
They’ll likely build on their growth sectors like PetCare and Value-added while addressing issues in the Frozen segment.
Makes sense. I’m excited to see how they continue to innovate and grow.