Thai Union Group has reported a rise in its profit margins despite a 2% year-on-year decline in sales in the second quarter of 2018 to THB 34.1 billion (€885 million).
The group, whose brands include John West, saw its net profit margin improve to 4% from 2.9% in the first quarter, and if foreign exchange impacts were excluded, sales would have held stable at around 0.1%.
Gross profit also improved significantly from the prior quarter to THB 4.7 billion (€122 million), and the gross profit margin rose to 13.8%, 2.5% higher than the previous quarter.
The group said that inventories of higher-priced raw materials, particularly in the shrimp business, contributed to ongoing gross market volatility.
Ambient seafood sales in the second quarter fell by 1.6% year-on-year to THB 16.4 billion (€426 million), and sales in frozen and chilled seafood fell by 2.6% year-on-year to THB 13.3 billion (€345 million).
Tougher market competition in North America, combined with the depreciation of the US dollar, saw the sales of ambient, frozen and chilled seafood, particularly shrimp and lobster, decline in value, despite the volume of the frozen and chilled business growing by 3%.
In the first half of 2018, North America contributed 38% of Thai Union Group's total sales, followed by Europe at 32%, the Thai domestic market at 10%, and other markets at 20%.
"Despite continued pressures from volatile raw material costs and challenging market environments, we increased our gross margin and net profit showed improvement," said Thiraphong Chansiri, CEO of Thai Union.
"Thai Union 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.”
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.