Seafood giant Thai Union Group has downgraded its 2023 sales forecast further on the back of third-quarter revenue declines.

And it is the company’s petcare division that has struggled for sales the most, posting a 39.2% year-on-year decline for the three months to 30 September.

Frozen and chilled seafood sales dropped 21.8% and ambient seafood sales were down 6.7% compared to the equivalent period 12 months earlier.

Thai Union said this was due to the “destocking effect, negative product mix and lower freight prices”.

On the back of these results, the John West and King Oscar brands owner has forecast a year-on-year decline in sales of 10-12% for 2023. Its previous guidance suggested a 5-6% dip in annual sales.

Thai Union, one of the world’s largest seafood players, recorded third-quarter sales of THB33.9bn ($955m), down 16.8% year-on-year. It pointed to “lower sales volumes across all categories” and also cited “the average selling price decrease”.

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The company’s operating profit for the quarter was down 5.4% year-on-year at THB2.2bn while net profit slid 52.3% at THB1.20bn. Thai Union said this was partly explained by a negative impact from foreign exchange losses.

Commenting on key risk factors moving forward, Thai Union highlighted weak global consumer spending and a potential recession in Europe.

However, it said demand for ambient products tends to increase in a recession as the likes of tinned sardines and mackerel are considered to be affordable items.

The company said it will continue to monitor the macro-environment, ongoing
global supply chain challenges and uncertain global consumer spending in its key markets.

The dramatic decline in sales in its petcare division comes nearly a year after Thai Union revealed it was planning to grow this arm of its business via new operations in China and Europe for its subsidiary i-Tail.

It said last December that capital from the proceeds of i-Tail’s recent IPO would be used to establish new businesses in Shanghai, China, and Utrecht in the Netherlands.