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Thai Union Q1 profit slumps 19%

Business 'remained on track' despite 'intensifying' competition in the US ambient seafood sector, Thai giant says.

Thai Union Group reported a 19 percent drop in its first quarter profit, despite a nearly 10 percent jump in its year-on-year turnover.

The shrimp and tuna giant's net profit for the quarter ended March 31, 2016, amounted to THB 1.2 billion (€30 million/$34.2 million) down from THB 1.5 billion (€37.4 million/$42.7 million) in the same quarter last year.

Earnings per share (EPS) came to THB 0.26 (€0.01/$0.01), a decline from THB 0.32 (€0.01/$0.01) in the comparable quarter of last year.

Sales grew 9.3 percent year-on-year to THB 31.2 billion (€778.9 million/$888 million), mainly as a result of organic growth and the recent acquisition of a 51 percent stake in Germany's Rügen Fisch, which was consolidated into the group's books in early February.

Overall, the first quarter was in line with expectations, the company said, and "overall business remained on track."

A weaker Thai baht against the US dollar and the euro "also positively impacted our financials" and the group benefited from some FX gains from hedging. 

Nevertheless, the quarter "was not without challenges. Intensifying competition in the US ambient seafood sector took a toll on our subsidiary at a time when we traded sales for sustainable margin with a stronger focus on profitable categories," it said.

Gross profit was reported at THB 4.8 billion (€119.8 million/$136.6 million), which is up 22.9 percent from the previous year.

This was the result of a "strong performance" of the Thai Union's European business and their brands, the "continual recovery" of its pet care unit, and the favorable impact of low raw material costs on our tuna brands and shrimp trading business.

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