Thai Union Group Public Company (TU) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered 4% sales growth and the highest gross profit margin in 12 quarters at 18.5%, driven by strong performance in Ambient, PetCare, and Value-added segments despite supply chain challenges.

• Net profit for Q2 was THB 1.2 billion, up 14% year-over-year, with six-month net profit from continuing operations at THB 2.9 billion, a 15.7% increase.

• Free cash flow reached over THB 5 billion in the first half, the highest in 16 quarters, reflecting robust operational efficiency.

• Interim dividend payout set at THB 0.31 per share, representing a payout ratio above 50%.

• The company advanced its Strategy 2030 and SeaChange® 2030 initiatives, maintaining a focus on growth, innovation, and sustainability.

Financial highlights

• Q2 2024 sales rose 3.6% year-over-year to THB 35.3 billion, with gross profit up 13.7% and operating profit up 10.6%.

• Gross profit margin reached 18.5% in Q2, the highest in 12 quarters, supported by PetCare and Value-added segments.

• Net debt to equity at 0.82x; net debt to EBITDA improved to below 4x.

• Operating cash flow for the six months was THB 6.5 billion, up from THB 5.3 billion year-over-year.

• CapEx for the year targeted at THB 4-4.5 billion.

Outlook and guidance

• Full-year 2024 sales growth guidance upgraded to 4%-5%, with gross profit margin expected at 18%-18.5%.

• SG&A to sales ratio expected at 12%-12.5% for the year.

• Expecting Q3 to deliver the highest gross profit margin of the year, with some decline in Q4 due to seasonality.

• Management expects the divestment of Red Lobster to be completed within 2024, with no further significant financial impact.

• Effective tax rate for the year expected at 6%-8%.