Thai Union profits soar as seafood demand recovers

Thai Union Group Plc (TU), a leading global seafood producer, on Monday reported an all-time high net profit in the second quarter of 2.34 billion baht, up 36.5 per cent from a year earlier, boosted by recovery in demand for seafood products.

The rise was driven by solid core businesses, notably frozen and chilled seafood and its pet food arm PetCare, as well as a turnaround of Red Lobster’s operations, the chief executive Thiraphong Chansiri stated through the Stock Exchange of Thailand.

TU’s sales volume in the first half grew by 6.3 per cent year-on-year in key regions including North America and Europe, thanks to the recovery of frozen and chilled seafood products in line with city reopenings.

The company’s net profit margin in the second quarter stood at 6.5 per cent, up from 5.2 per cent a year earlier, according to the statement.

TU also announced the 2021 first-half interim dividend of 0.45 baht per share to be paid on September 7.

Earlier TU shut its canning plant in Songkhla for 2 weeks after some employees tested positive for Covid-19, then resumed on July 5.

“Despite facing some challenges from Covid-19 in our Asian operations, we are ramping up production,” said the company.

The key risks for the rest of the year include shipping container shortages, high freight rates, rising packaging and edible oil prices, and pandemic situation, it said.

Analysts at Yuanta forecast that TU will likely benefit from the weakening of baht during the second-half of 2021, with a full-year earnings estimate of 6.6 billion baht.

Yuanta rated ‘Buy’ on the stock with a target price of 25 baht per share, while TU traded at 22.30 baht as of 3.20 pm, slightly down 0.89 per cent from its previous closing.

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