Earnings Report /
Thailand

Thai Union Group PCL: Core profit in-line; YoY core profit ascent to resume in 3Q22

  • Net profit beat it but core profit was in line with our estimate

  • TU posted a 2Q22 net profit of Bt1.62bn

  • We model a Bt1.8bn core profit for 3Q22

Bualuang Securities
9 August 2022

Our TRADING BUY stands, based on 2H22 core earnings’ resumption of YoY growth and its valuation unlocking from listing i-Tail in 2H22.

Net profit beat it but core profit was in line with our estimate  

TU posted a 2Q22 net profit of Bt1.62bn, down 31% YoY and 7% QoQ. Excluding extra items in 2Q22—Bt475m FX gain, Bt424m in expenses related to the fair value adjustment on Red Lobster (RL)’s preferred shares and Bt195m in restructuring costs related to the closure of one Rugen Fisch plant in Germany—core profit was Bt1.77bn, down 21% YoY but up 3% QoQ. Net profit beat our model by 7% thanks to the bigger than estimated FX gain while core profit was consistent with our model. Sales and GM were in line with estimates. GM of 17.4% was close to our estimate of 17.5% (but lower than 19% in 2Q21 and close to 17.5% in 1Q22). RL’s equity loss was 13% deeper than modeled.