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Introduction & Market Context
Thai Union Group PCL (SET:TU) presented its Q2 2025 financial results on August 5, showing improved profitability despite a sales decline. The seafood processing giant reported a 5.4% year-over-year decrease in sales to THB 33,389 million, while adjusted net profit increased by 13.2% to THB 1,506 million.
The company’s stock has experienced pressure in 2025, with the presentation noting a share price movement of -14.8% in the first half of the year. According to recent market data, Thai Union’s shares closed at THB 12.70 on August 8, 2025, down 1.57% for the day.
Quarterly Performance Highlights
Thai Union achieved a gross profit margin (GPM) of 19.7% in Q2 2025, marking an all-time high for the company. This represents a significant improvement from the 18.8% GPM reported in Q1 2025.
"In Q2 2025, Thai Union continued to demonstrate strong operational execution despite external headwinds, including the 19% U.S. import tariffs," said Ludovic Garnier, Group CFO. "We delivered solid profitability, supported by resilient margins and effective cost control."
As shown in the following chart of key profitability metrics, while sales declined, the company managed to improve its profit margins across the board:
The company’s adjusted operating profit increased by 3.2% year-over-year to THB 2,142 million, with an operating profit margin of 6.4%. Earnings per share rose 18.5% to THB 0.32 per share, up from THB 0.27 in the same period last year.
The following bridge chart illustrates how various factors contributed to the net profit improvement from Q2 2024 to Q2 2025:
Strategic Initiatives
A major development announced in the presentation is Thai Union’s expanded business alliance with Mitsubishi Corporation (MC). The Japanese conglomerate will increase its stake in Thai Union from 6% to 20% through a general offer at THB 12.50 per share.
This strategic partnership, which dates back to 1991, aims to strengthen Thai Union’s global presence by leveraging both companies’ expertise and product development capabilities, particularly in seafood and pet food categories.
The following slide details the transaction and expected benefits of this expanded alliance:
Thai Union also announced an interim dividend of THB 0.35 per share for the first half of 2025, maintaining a high payout ratio of 59%. The dividend will be paid on September 1, 2025, with an ex-dividend date of August 15.
The company’s historical dividend payments and payout ratios are illustrated in this chart:
Detailed Financial Analysis
Thai Union’s sales decline of 5.4% in Q2 2025 was primarily attributed to a 4.7% unfavorable foreign exchange impact, with the Thai baht strengthening against major currencies, and a modest 0.7% drop in organic sales growth.
The company’s gross profit margin has shown consistent improvement over the past several quarters, reaching its peak in Q2 2025:
By business segment, the Ambient seafood division achieved a remarkable GPM of 22.0% in Q2, the highest in 11 quarters. The Pet Care segment continued to deliver strong margins at 25.1%, while the Frozen and Value-added segments reported GPMs of 12.0% and 27.1%, respectively.
The following chart breaks down the GPM by business segment:
Operational Efficiency
Thai Union’s improved profitability comes amid favorable raw material price trends. Tuna and shrimp prices eased as anticipated, while salmon remained at a low point, as shown in the following chart:
The company is also making progress with its transformation programs. The SONAR initiative, a group-wide transformation program, targets USD 15 million in savings for 2025, with USD 5 million already achieved in the first half. Meanwhile, the Tailwind program, focused on Pet Care transformation, aims for a USD 17 million operating profit uplift, with USD 7 million realized in the first half.
President and CEO Thiraphong Chansiri emphasized the impact of these initiatives: "Our strategic transformation is delivering tangible value, creating a more agile and efficient organization. This has allowed us to achieve a significant lift in profitability."
Forward-Looking Statements
Despite the improved profitability, Thai Union faces several challenges. The company’s net debt increased to THB 59.1 billion, primarily due to its share buyback program, though it delivered a strong free cash flow of THB 1.7 billion.
The following waterfall chart illustrates the changes in net debt during the first half of 2025:
Thai Union also highlighted the impact of the BEPS 2.0 Pillar 2 implementation, estimating a group top-up tax of THB 100-150 million for fiscal year 2025, with THB 31 million already incurred in Q2.
The company’s Ambient segment, which showed strong margin recovery, is expected to maintain its performance within the long-term target range of 20-22% GPM:
Looking ahead, Thai Union’s focus remains on operational efficiency, strategic partnerships, and maintaining its strong dividend policy, while navigating external challenges such as currency fluctuations and tariff impacts.
Full presentation:
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