Global seafood giant Thai Union saw its operating profit sank 27 percent in the second quarter as it battled higher operating expenses and increased logistics costs.
Operating profit for the quarter was THB 1.7 billion (€45.9 million/$47.6 million), a decline from last year’s record THB 2.34 billion (€63.2 million/$65.5 million) second quarter profit.
The group blamed the weaker second-quarter performance on increasing operating expenses, which rose 14.9 percent year on year.
Higher logistic costs, including a THB 560 million increase (€15.1 million/$15.7 million) in freight expenses and THB 195 million (€5.3 million/$5.5 million) in costs associated with restructuring its Rugen Fisch subsidiary in Germany accounted for a portion of the higher operating costs.
Despite this, the company saw quarterly revenue hit an all-time high of THB 38.9 billion (€1.1 billion/$1.1 billion), an increase of 8.5 percent compared to the same period last year, driven mainly by increased demand and higher selling prices.
"Business diversification continues to be the cornerstone of our ongoing growth path, reflected in our results for the second quarter, which remained robust despite the impact of two one-off items," said Thiraphong Chansiri, CEO at Thai Union Group.
Thanks to strong demand for pet food and higher sales from value-added products, the company's PetCare and value-added unit (which also includes revenue from other smaller operations) posted a 41.7 percent year-on-year increase in sales to THB 8.1 billion (€218.7 million/$226.8 million).
Ambient seafood performed well, with sales growing 10.7 percent to THB 16.9 billion (€456.3 million/$473.2 million) thanks to a combination of higher prices, depreciation of the Thai baht and strong consumer demand.
The frozen and chilled seafood business, however, booked a 6.5 percent year-on-year decline in sales to THB 13.9 billion (€375.3 million/$389.2 million).
"Thai Union remains on track to achieve our 2025 financial and business targets, but we recognize that economic conditions continue to present a challenge, including inflationary pressures in many markets, rising interest rates and ongoing supply chain issues," said Chansiri.
"So, we are firmly focused on cost efficiency, continuing to strengthen our core businesses and building value-enhancing operations."
