Bangkok: Thai Union Group PCL, one of the world’s biggest makers of canned tuna, will take a roughly US$530mil charge as it plans to exit unprofitable unit Red Lobster.

       Thai Union will book the one-time impairment charge in its fourth-quarter earnings after deciding to exit the US seafood restaurant chain, chief executive officer Thiraphong Chansiri said.

       Red Lobster’s ongoing financial requirements no longer align with Thai Union’s capital allocation priorities, he added.

       Challenges that hit Red Lobster in recent years included the Covid pandemic, sustained industry headwinds, higher interest rates and rising material and labour costs, Thiraphong said in exchange filing.

       That resulted in a “prolonged negative financial contribution” to Thai Union, he said.

       The Thai seafood giant paid US$575mil in 2016 for a 25% stake in Red Lobster – plus preferred stock that can convert into a further 24% shareholding – and bought another 13.7% of common equity interest in 2020. The company also owns the Chicken of the Sea and John West brands.

       In the July to September period, Thai Union’s share of losses from Red Lobster operations was 395 million baht, up from 94 million baht the previous quarter, according to a company presentation on its website. In 2022, the share was 1.21 billion baht, compared with 178 million baht the year earlier. — Bloomberg

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