BANGKOK, Aug 6 (Reuters) - Thai Union Group Pcl’s second-quarter profit nosedived 99 percent from a year earlier as the world’s largest producer of canned tuna recorded 1.43 billion baht ($42.92 million) of one-time accruals to reflect potential litigation risks.
Subsidiary Chicken of the Sea reached a settlement with Walmart in an ongoing antitrust litigation and is in advanced negotiations in various other litigations as well, Thai Union said, adding that the unit recorded one-time accruals of $44 million “to reflect potential risks.”
The U.S. market accounted for 38 percent of the group’s sales, while Europe and Japan contributed 32 percent and 6 percent respectively.
Net profit was 9.8 million baht ($300,000) for the April-June quarter, compared with 1.41 billion baht a year earlier and a Thomson Reuters I/B/E/S estimates of 1.1 billion baht.
Normalised net profit declined 3.7 percent to 1.36 billion baht, while sales dropped 2 percent to 34.1 billion baht due to an appreciation in the baht and higher raw material prices.
“Despite continued pressures from volatile raw material costs and challenging market environments, we increased our gross margin and net profit showed improvement,” Chief Executive Officer Thiraphong Chansiri said in a statement.
Gross profit margin improved on a quarterly basis to 8.2 percent, but was down 1.25 percent on year. Average tuna price was $1,667 per ton in the second quarter, down 5.4 percent from a year earlier.
Thai Union also announced interim dividend payment of 0.25 baht per share, or a payout ratio of 53.3 percent of normalised net profit for the first half of 2018. ($1 = 33.3200 baht) (Reporting by Chayut Setboonsarng; Editing by Subhranshu Sahu)