International food and beverage manufacturing company Thai Union posted a loss of THB 17.2 billion (USD 477.5 million, EUR 442.9 million) in the fourth quarter of 2023, culminating in the write-off of its investment in the Red Lobster seafood restaurant chain, according to the company’s latest results report.
Thai Union originally upped its investment in Red Lobster in 2020, taking a larger stake in the chain as part of a consortium that bought out Golden Gate Capital’s remaining equity stake. However, in January 2024, after several consecutive periods of poor performance, Thai Union announced it aims to pursue an exit from its strategic partnership and minority investment in Red Lobster Master Holdings, which it has held since 2016.
“During the past years, the combination of the Covid-19 pandemic, sustained industry headwinds, higher interest rates, and rising material and labor costs have impacted the Red Lobster business, resulting in prolonged negative financial contributions to the company and its shareholders,” Thai Union said in a 16 January announcement.
Following that announcement with its Q4 and full-year 2023 results, Thai Union said the decision to exit from the chain came from a review of Red Lobster that sought to identify areas where it could enhance operational and financial aspects of the chain. After its analysis, the company concluded that the ongoing financial demands of Red Lobster no longer coincide with Thai Union’s priorities. Consequently, the company decided to divest from its minority investment in Red Lobster.
As a result, Thai Union recorded a one-time, non-cash impairment charge of THB 18.4 billion (USD 510.7 million, EUR 473.8 million) in the Q4 2023.
The share of Thai Union’s losses stemming from Red Lobster also continued to rise in the fourth quarter, reaching THB 552 million (USD 15.3 million, EUR 14.2 million), which was up THB 456 million (USD 12.6 million, EUR 11.7 million) year over year, largely due to ...
