Thai Union Q2 beats market expectations by 20% despite 30% drop in profits

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Thai Union Group Plc (TU), the world’s leading producer of tuna, reported its 2nd quarter earnings that were impacted heavily due to the rising logistics costs despite recording a all-time high revenues.

TU, the owner of global brands as ‘Chicken of Seas’ and domestically marketed ‘Sealect’ tuna, announced that its quarter profits for the 2nd quarter ending June 2022 stood at a mere 1.62 billion Baht against 2.34 billion Baht seen in same quarter of last year, a drop of 30.69% year-on-year (YoY).

A survey of 15 brokers had indicated that TU would report earnings that would be a mere 1.36 billion Baht, thus beating the estimates by as much as 20% after TU reported net profits of 1.62 billion Baht.

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TU said that it delivered an all-time high quarterly sales during Q2 2022 and this was driven by higher selling prices, foreign exchange (as Thai Baht weakened), and rising demand in PetCare & value-added (+41.7% YoY) and ambient seafood (+10.7% YoY).

But these numbers were overshadowed by the higher logistics costs of 560 million Baht due to freight price hikes amid rising fuel prices and shortage of containers and ships to carry goods around the world.

TU said that it was also paying a 0.40 Baht a share in dividend for the 6-months operations of 2022.

The company added that some of its operations such as Red Lobster in the United States was still losing money, with this brand picking off 383 million Baht of the profits. While others such as its business in India – Avanti, was contributing positively to the bottom line as thanks to improving feed and recovering frozen businesses, despite higher raw material prices and ongoing supply chain challenges.

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