BRUSSELS: Thai Union Frozen Products reported a drop in Q2 net profit, despite a growth in sales stemming from the addition of recently acquired Meralliance, King Oscar and Orion Seafood International.
The Bangkok, Thailand-based company — which owns the John West and Petit Navire tuna brands in Europe and Chicken of the Sea in the US — reported net profit of THB 1.41 billion ($40.07 million) for the quarter ending June 30, down 7.2% year-on-year.
The drop in net profit is mainly due to an foreign exchange loss, higher income tax expenses and higher selling, general and administrative expenses, said Thai Union.
Thanks to a second full quarter of revenue consolidation, the company’s newly acquired business, namely France-based Meralliance, Norway-based King Oscar and Orion, based in the US, are attributable to the group’s continued sales growth despite euro depreciation.
This was part of the reason for Q2 sales rising 1.3% y-o-y to THB 30.64 billion, said Thai Union.
Part of this revenue growth in Thai baht terms was supported by weaker THB against the US dollar, the company said.
The deep euro depreciation against the baht also limited the sales growth.
In spite of the challenges of currency fluctuations and certain one-time expenses, the operating performance of the company had been satisfactory,” said Thiraphong Chansiri, president and CEO of Thai Union.
Moreover, the merit of investing in first class European companies as part of our overall global strategy has been clearly demonstrated in the past few quarters by their strong operating performances. These companies show strong resilience and thrive in tough market conditions,” he said.
According to Thai Union, the company’s European subsidiaries, led by Paris-based MW Brands, “showed robust performance so far this year”.
Looking at the whole first half, 42% of sales came from the US; 31% from Europe; 8% were domestic; 6% from Japan; and 13% from other countries. Tuna sales were 40%; shrimp and related business were 27%; salmon, 8%; pet food, 7%; sardine/mackerel, 6%; and value-added and other products were 12%. In general, these breakdowns are fairly stable this year.
The proportion of sales from own brands increased to 43%, versus 41.3% a year ago, with own label manufacturing sales accounting for the balance, the company said.
