Welcome to Thai Union conference call for first quarter earnings. We have top executive here joining us today. Let me introduce Mr. Ludovic Garnier, Group CFO.
Hi, guys. Good afternoon for the people here in Thailand, and good morning for those in the U.S.
Ms. Narisa Phahulrat, Group Accounting and Controlling.
Good evening, everybody. Glad to have you all here with us.
Myself, Kalvalee Thongsomaung, Head of Investor Relations. Now please allow me to pass on the stage to Mr. Ludovic to begin the session.
We have some very good news to announce to you today. Maybe you have seen already on the SET website our numbers, we have many good news to share with you, and I hope you will be very pleased with our results, which are very strong. Just moving to slide five. Here, just a quick highlight for the quarter. Top line is at THB 31 billion. Very steady, very stable compared to last year, I will get back to this one. Gross profit is high, at 17.7%. OP, Operating profit is at THB 1.9 billion. This is very high for a Q1. Net profit is very unusual for us for a Q1, and stands at THB 1.8 billion.
In fact, we are growing the net profit by 77% compared to last year. If I just get back to each of these components, top line, if you remember last year, we generated quite a heavy growth in Q1, thanks to the panic buying and the pantry loading happening in Europe and in the U.S. of course, in 2021, we don't have any more of this impact. You will see that we have a normalization in the ambient sales, but at the same time, we have a very strong push in our frozen category and also in our pet care and value-added category. This is why overall, we managed to deliver the same performance compared to last year. We have a small growth, including the FX and a very small decline, excluding the FX. Overall, I think we are very proud of this Q1 performance.
Just want to remind you also that in Q1 2021, we had to face the COVID-19 peak in Thailand, Samut Sakhon at the beginning of Q1. We will get back to this also, we had to face with many logistic issues happening due to the container shortage. Despite all of this, delivering the same sales as in Q1 2020 is a great performance, and I really want to thank all the Thai Union teams everywhere because it's a huge piece of work. Gross profit margin, I mentioned this one already. Absolute amount at THB 5.5 billion. In relative amount, it's 17.7%. Very consistent with what we have been delivering since Q2 already last year.
We told you that the target for this year was 17% on average over the whole year, we are exceeding this one. We will get back into the details, you will see all the three categories are really growing compared to last year in terms of gross profit margin. SG&A, I mentioned the logistic issues we are facing. We estimate the extra cost coming from all the container availability issue and the shortage and blah, blah, to be between THB 200 million-THB 250 million. This is why we have an increase in terms of percentage of the SG&A from 11.3%- 11.7% in 2021. If you exclude this impact, the SG&A only amount to 11.1%.
It's a bit slow compared to usual, and it's mostly explained by some marketing campaign activities, which will be postponed to Q2 and Q3. Okay. We have a different marketing campaign phasing compared to last year. Overall, OP for Q1 is still at THB 1.9 billion. Very close again to the performance we have been delivering in Q2 and Q3, and this is excellent. I think the key change compared to the previous quarters is below OP, we also have some good news. We have some FX gain. If you remember, in Q1 2020, we generated some FX loss by almost THB 260 million. In Q1 2021, we managed to deliver an FX gain by THB 240. Overall here you have a THB 500 million net income growth coming from this change.
We also managed to decrease our finance cost. If you remember, last year in Q4, we told you that we have been decreasing our net debt, because decreasing also our interest rates. I will get back also on Red Lobster. Red Lobster, we have also some positive news on the operation of Red Lobster, which are really recovering. We have also some one-off impact on the lease accounting. I will get back to this. You will see here, in short graph, all the good news. We are growing everywhere. I didn't mention the EBITDA, but the EBITDA is also growing by 30%. Overall, very good news. Gross profit increasing by 9%, OP by 22%, and net profit by 77%. Very strong, again, very strong performance in Q1. We are very happy.
The next slide, you will see our usual long-term view since Q1 2017. Here you can really see the improvements of the operations since now four years. We have been delivering five quarters in a row of top line growth. Okay. It's not a lot, I agree. Still, it's growing. We were expecting some normalization, and if you get back to last year, Q1 2020, we were generating 5.9% growth. We have been managing to deliver the same performance, and I think it's quite a strong achievement. Another good news is regarding the gross profit margin. If you look at our track record, that was really one of our key concerns back in 2018 and 2017. We managed to increase around 16% in 2019, and now since four quarters in a row, we are around 18%. Again, our full year target for the gross profit margin is at 17%.
In Q1, we over-deliver compared to this target, which is pretty unusual, because you know that the mixed category in Q1 is usually more push coming from the frozen business, which is less profitable for us in general. Net profit margin at 5.8% is very high for a Q1. Just if you go through the key developments, we just wanted to share with you also a quick update on the COVID-19 impact for us. We have been managing to keep all our operations uninterrupted since the beginning. We had only one exception in Ghana. If you remember, in 2020, our factory in Ghana was closed for a few weeks. Apart from that, everything is working almost normally. I mentioned to you the peak of COVID-19, which happened in Samut Sakhon, where we have our operation in Thailand. We had a bit of delay.
We had some specific measures in Thailand. Now all the employees get back to work and everything is working normally. The vaccination campaign is also going on. We fully comply with the local regulation, and of course, it depends on the vaccine's availability. Right now we have made some great progress in the Seychelles, in the U.K., in the U.S., and also in Thailand. We have been continuing to support the local communities, and you can see here we made some donation, some food serving in Samut Sakhon. We provided also some funds and some power strips to some hospital. We are really willing to help. We know that Thai Union has been quite lucky, during this COVID-19 pandemic, and we are really willing to help all our consumers, and the ecosystem around us.
Next, just a quick feedback also. We communicated on that in Q4 earnings release. We told you some news regarding our 2025 Corporate Strategy. Here you have a small graph where we are summarizing the key elements. You can see here on the top all the progress we make in our core business. First of all, we told you that we have a program for branded business, which is already ongoing in Europe since two years, and in the U.S. since last year. This is ongoing and this will continue. We have also great efforts regarding our manufacturing. We want to improve, we want to move to much more automation. Our R&D team are working regarding the factory of the future. We have three different steps. You will see here we have the culinary project we mentioned in Q4 2020.
The factory is starting to be built. We'll get back on this one, and it should be up and running in 2022. Healthy living, we have some examples of this one. I don't comment that much. We have some sustainable packaging commitments planned for 2025. If you look at the bottom part, these are all the key developments regarding the new value and enhancing businesses. I go quickly on this one. We have one specific slide just after. I don't need to repeat everything. You can see here on the right. It will just remind you our target for 2025. We want to achieve 10% of our top line coming from innovation with gross profit margin higher than 20%. We want to beat also, the inflation. We want to achieve 3% annual conversion cost improvement until 2025.
In terms of EBITDA, we have a target in USD, which is between $450 million-$550 million in 2025. Just a quick update also. Here you will see three areas where we wanted to do some specific communication. First of all, on ingredients, we told you that the new factory in Germany is operating since April 2021. The audit are currently going on. Of course, we have a bit of delay because of the COVID-19 restriction in Germany. We have launched also some products, the crude oil, the UniQ DHA, and the UniQBONE tuna calcium powder. We are also building a new factory in Thailand, a protein factory. On the supplements, we have been setting up a new company called Thai Union Lifescience. This company will be distributing some products in Q3 2021.
The two other joint ventures, we mentioned this one, ZEAVita by Interpharma and also ThaiBev, we mentioned this one in Q4 last year, and they will start commercializing their product in Q2 2021 and in Q4 2021. The last one, alternative protein, we told you that we launched the OMG Meat plant-based protein, which are available since March 2021 in Thailand. Plus, we are planning also to launch some new alternative protein product range, more the shrimp product, in Q3 2021. This is the next one. We do a quick focus on some products which were launched at Petit Navire in France. If you remember, so now we insist a lot on the healthy living and healthy products and healthy oceans. Here, Petit Navire have launched some new products in Q1.
These product are MSC labeled, and they are rich in essential nutrients such as vitamin C, omega-3, and antioxidant. Here, the idea is really to push further the Petit Navire market presence in healthy and nutritional seafood brand. They are available both online and also on the leading supermarket. We are very happy about these developments. We have been working very hard on this one. There will be some more coming in the U.K. soon, and also in the other countries. This is the right direction, I think. Last, supply chain. You know this is now one of our strengths. For Thai Union, we have been partnering with TNC, which is The Nature Conservancy, and we have a commitment to move to 100% electronic monitoring of tuna supply chain by 2025.
You can see just below, we have also some other initiative on sustainability. Overall, we are making some good progress. You can see the last red point, our sustainability efforts really continue to be recognized. You can see here some different examples where we have been recognized on this one. Here, just as an overview, very strong Q1 performance. We are very happy on this one. We will dig a bit more into the details, thanks to [Non-English content] Aimee. Aimee, to you.
Thank you, Ludo, and hello again, everybody. He already cover some of the key takeaways here. One thing that is worth reminding is that we have our first quarter record high net profit, 77% improved year-over-year to THB 1.8 billion. If you look at the absolute value, we gained THB 787 million versus last year. Part of it is from our strong operating profit. We gained THB 343 million, and the other part is from other non-operating expenses. We gained THB 444 million. Next, please. Tuna prices were down 4% versus prior year, I'm sorry, versus prior quarter, and down 11% versus prior year. Prices at Q1 2021 was $1,283 per ton, and outlook in April has already increased to $1,340 per ton. Prices are within our expectations. Next, please.
We have already mentioned the revenue, THB 31.1 billion. Allow me to move to the next slide for more detail. Next, please. Here, mixed picture between our main three segments. If you compare Q1 2021 to pre-COVID-19, sales increased 6%, and we are very happy with Q1 2021 performance when we compare to the normal situation. Move over to Q1 2021 versus Q1 2020, sales were stable, and if you break that down, we had increases in frozen, pet care, and value-added, offset by decline in ambient. Ambient dropped 13% due to, first, exceptional increased demands at the beginning of the pandemic last year. Second, container shortages this year causing delayed shipments. Frozen turnaround and grew 10%.
Restaurant and food services rebounded from vaccine rollout, which proving effective in bending the curve of infected cases, particularly in the U.S., as well as stimulus checks and other relief supports from the government. This drove increased demand for our shrimp, lobster, crab meat in food service and other channel. Pet care improved 27%. The demand was stimulated from repeated lockdowns and isolations. More pets were acquired, and people spend for better ingredients in pet food and treats, resulting in encouraging product development and innovative. Our product portfolio expanded in both existing and new products. Next. Wait, no, sorry. Let's go back. Next is value-added. Let's go back. Value-added grew 10% year-over-year, led by packaging business, who support can and pet care products of our own and external market. FX impact was positive, THB 78 million from gain in EUR, offset by loss in USD. Next, please.
Let me add maybe just one thing on this one. I think this is a very important chart. If you remember last year in Q1 2020, when we were generating quite a high growth compared to last year from the ambient business, there were many questions regarding how sustainable the growth is. I think with this chart, you can see very well the interest for Thai Union having a very diversified portfolio. Here you can see in Q1 2021, we indeed have some normalization of our ambient products. You can see this on the left. You can see that the frozen products, and then on the right, the pet care and value-added products, are really compensating the decline coming from the ambient. I think this is a very important chart.
We strongly believe that with our unique positioning, which is combining ambient, frozen, pet care. We are very well positioned, and you can see here in Q1 that we managed really to deliver the same very strong performance that in Q1 2021. I think it's a very good point to keep in mind. Back to you, Aimee.
Thank you, Ludo, for adding all good information. Next, please. Look at revenue structure is well diversified, and in terms of regional mix, there were changes coming from U.S.A. sales shift to 43% of total sales portfolio, driven by 6% sales increase, thanks to frozen recovery. Domestic also shifted to 12%, driven by 5% sales increase, mostly from pet care. Europe reduced to 27% due to 11% sales decline, resulting from panic buying in March last year. Next, please. Gross profit, like Ludo mentioned, improved 9% year-over-year to THB 5.5 billion, thanks to growth in pet care value added and frozen, offset by softening in ambient. In terms of gross profit margin, all segments improved and margins have been consistent in the last five consecutive quarters. Next.
Here, operating profit was THB 1.9 billion, increased 22% year-over-year. Moving to cost, higher SG&A, 4%, primarily due to higher logistic costs, offset by lower marketing and advertising and other selling expenses. We control unnecessary spending in the level where operating profit is leveraged. Next.
Let me just add on this one, because I think it's a very important point. The OP we say in Q1 2021 is THB 1.9 billion. Okay. If you compare, last year it was THB 1.5 billion, benefiting from some push on the ambient sales. If you compare to before COVID-19, in Q1 2019, the OP during this quarter was only THB 1 billion. Here, in two years, we have been managing to increase from THB 1 billion- THB 1.9 billion. Very important, this is one of the key driver for strong performance in Q1. You could see that the mix of our category has really changed in Q1, but very strong OP. Even in the OP, we mentioned that in the SG&A, we have some extra costs coming from the logistic issues and the container shortage.
We have been in discussion with our customers, with our supply chain partners on sharing this cost. It does not mean that the THB 250 is an impact bottom line. It's a clear impact in our SG&A. We have been managing to pass through some of these costs to our customers and also to our supply chain partners. Overall, we are really delighted with this Q1 OP. Back to you.
Thank you. EBITDA was THB 3.4 billion, increased 30% year-over-year, driven by favorable non-operating expenses, mostly from FX gain as a result of Thai Baht depreciated against the USD. Other changes were from lower finance costs from lower debt principal and lower interest rates, offset by higher other income due to fair value adjustment in Russia and higher tax from more profitability. Regarding share profit movement, this will be illustrated later by Ludo. Next, please. Net profit for the quarter, THB 1.8 billion. Next. Here, there were two one-offs for the quarter. One was Red Lobster lease adjustment for the amount of THB 154 million after tax. Two was THB 73 million fair value adjustment in Russia due to the business was underperforming. Net profit excluding one-offs was THB 2.0 billion or 100% improved year-over-year. Next.
Earnings per share was 0.37 THB in Q1 2021 versus 0.20 THB in Q1 last year. Next. Here, Red Lobster, I am going to pass this over to Ludo, please.
Thanks. Thanks, Aimee. Red Lobster, we have two key topics to mention to you, and this is our usual slide where you can see all the details of Red Lobster contribution in our numbers. The first news is on the share profit coming from the operations. Red Lobster is generating some profit in Q1 2021. You can see THB 81 million to be compared to a loss by THB 111 last year. If you remember, March 2020, peak of the COVID-19 in the U.S., we had many restaurants in the U.S. being closed, which explained the loss which happened last year. We're expecting the situation to improve, and we are expecting Red Lobster to be around breakeven in Q1. They have been over-delivering compared to our own expectation, and the operation have been very successful. There are a few explanation from that.
Some of them are maybe one-time, I would say, because we were benefiting in Q1 from some stimulus check, some free money provided by the U.S. administration to many people, and some of these people have been spending this money in our restaurants. We've been benefiting from this fund, and the same for the whole restaurant industry. Apart from that, you know that Q1 is always a very good quarter for Red Lobster. This is Lent period for the Christians, and many people go to the restaurants at that time. In Q1, we could see that. We have also some feedback from Red Lobster management saying, "We start to see some customers we have not seen since one year." We can see the vaccination campaign in the U.S. is very successful. We can see that with the numbers.
Now people feel more and more trustful, and they can go back to the restaurants. The whole industry has been benefiting in Q1 from this increase. Red Lobster particularly. Of course, we will need to follow up over the next quarters, this is a very good news, we are very happy about this one. We are still a bit careful on Red Lobster. If you remember last year, they have been generating 1.2 billion THB. For sure, there will be some losses generated in the next quarters, we still maintain our target of generating half of the losses in 2021 compared to 2020. However, the picture is good, it is really improving. Keep in mind, one thing also, is that the average capacity for Red Lobster restaurants is still around 50%.
Here, it means that they have been able to manage to deliver a profit in Q1 2021, with almost all the restaurants open, but only with 50% capacity. This is really a great performance coming from them. Now, we are facing some new challenges. Indeed, we need to hire more staff and more managers in our restaurants. There is a high competition on these people. Plus, the fact that the administration is providing some free money to many people is not a good incentive for many people to get back to work on this one. You can see now, and you could see there were a lot of articles in the newspaper recently on this one of people trying to hire more workers and more staff.
The first good news is really Red Lobster is back to profit in Q1, and this is a very good news for all of us. There is a second news, which is a second line that you can see here. Share of profit coming from the lease accounting adjustment, which is a loss by THB 307 million. Where does it come from? On this one, usually the U.S. GAAP and the Thai GAAP are almost fully aligned on the lease accounting standard. Here we are just talking about a specific accounting standard, which is called lease. Here, normally, you don't have a big difference between U.S. GAAP and Thai GAAP, except on one thing. The rhythm of depreciation of the right of use is different between U.S. GAAP and between Thai GAAP.
In fact, in Thai GAAP, it is what we call front-loaded, meaning at the beginning of the lease, you will record more depreciation expenses in Thai GAAP compared to U.S. GAAP. Okay? This is why at the beginning of the lease, you generate more expenses in Thai GAAP. Normally, you don't have any significant impact, and I have never seen in any other companies some significant adjustment coming from this difference. However, within Red Lobster, there is one specific and unique situation. Two years ago, they have been doing a transaction, a sale and leaseback for the vast majority of their restaurants. This is why now, when you look at the portfolio of Red Lobster, something around 800 lease, the vast majority is just at the beginning of the lease period. Okay? This is where we have a significant negative adjustment between U.S. GAAP and IFRS.
The lease period is always a bit long in Red Lobster, on average, between 20-40 years. Okay? As I mentioned, we had something like 800 lease to be analyzed. Here, it took us a long time, really, for us to assess these differences. Initially, we thought beginning of 2020 that there was no impact coming from these differences because we could not see anywhere any difference coming from that. However, we have been investigating, and it took us a lot of time. Remember in 2020, Red Lobster was facing with a lot of challenges in these operations. They have been working also on the refinancing. We only get the conclusion early 2021, and this is why we record in Q1 2021, this negative one-off. If I go into the details. Over this 300 adjustment, it is made up with two parts.
There is one part which is related to prior year, which is for THB 207 million. There is another part which is specific to Q1 2021, which is THB 100 million. The total impact on the share profit is -THB 307 million. Of course, we record some additional expense, we have a small portion, which is offset by some tax credit for 25%, and we have something like THB 78 million tax credit happening in Q1. Moving forward, we will have this impact every quarter. We can already mention that in Q2, in Q3, in Q4, we should have roughly an impact of -THB 100 million in the share of profit, and an impact of +25 in the tax. We do expect to have a net impact around THB 75 million coming in Q2, in Q3, and Q4.
This is not a good news, however, we have to recall this one. It's a pure accounting difference, a pure timing difference between U.S. GAAP and between TFRS. There is no cash impact at all. Apart from this one, we have the usual topics in the other income, in the interest expense and income tax. You can see the net income impact coming from Red Lobster was positive in Q1 at THB 64. If you compare to the contribution in Q2 2020 and Q4 2020, we are very happy about these developments. Just next slide. We just wanted to share with you some of the improvements performed by Red Lobster during this quarter. You can see on the top right, we start with this one. This is a percentage of outlets which are opened.
You can see in March and April 2021, we are quite high, around 96% and 98%, which is quite strong. If you compare to last year, they were almost all closed in March 2020. There were different initiatives which were launched in Q1 2021. Of course, we have the Lobsterfest, which is one of the key events for Red Lobster. We have Valentine's Day. We have also the Lent period. I mentioned this one. The off-premise business remains also very strong. The curbside pickup also has been growing very quickly. If you remember, we discussed in Q4 regarding all the digital investments that Red Lobster have been doing. The menu has been changing. If you remember last year, we moved to something which was very simplified. We moved to a 40 pages menu to something which was only two pages. Now we are increasing again.
We have more customers, and they want to have more choice, so we are reacting very proactively on this change. Right now, as I mentioned, the key focus is really for us to attract some new staff and new managers. Of course, one of the key actions facing all these issues with the operations in 2020 was to cut into the resources of the restaurants. Now we have the new challenge beyond us, which is recovering and increasing again, all these people. We are positive regarding the outcome of Red Lobster in 2021. The vaccination campaign is very successful in the U.S., as we mentioned. There are also some few stimulus check coming on this one. We are also conservative.
We maintain, for the time being, our assumptions of loss decreasing by 50% in 2021 compared to 2020. We may have some good news in the future regarding Red Lobster. Back to you, Aimee, for the net working capital discussion.
All right. Thank you, Ludo. Here, we had -THB 125 million free cash flow for the quarter. We generated a strong profit. This required cash for our net working capital. At the same time, we had high level of inventory in transit due to delayed shipment. This inventory hasn't been created cash to us yet. We saw this as a temporary timing issue, and will be recovered in the next quarter. Next, please. Here, net debt increased by THB 1 billion, driven by reduced in net working capital, as I just mentioned on the previous slide, offset by gain in EBITDA THB 3.4 billion. Capital spend, investing in financing activities, and everything else were in the normal level. Net debt per equity ratio was 0.93 versus 0.94 at the beginning of the year, because equity increased more than debt increased. Next, please. Here, our interest bearing debt funding.
The debt was diversified to different currencies through the new sustainability-linked loan program. In Q1 2021, Thai Baht funding was reduced and increased to USD, EUR, and JPY in order to reduce the currency volatility. On the right-hand side, by maturity, changes were from long-term debts that are mature in 2022 will be classified to short-term, as shown on the right bar. Shift was from 14% to 37% in Q1 2021. Next, please. Financial ratios, they all healthy. Return on equity and return on capital employed were improved to 15.5% and 10.4% respectively. Net working capital was high from temporary increase of inventory, and net debt per equity was healthy at 0.93. Next, I'll pass the presentation to [Non-English content] Gail.
Thank you, [Non-english content] Aimee. For this slide, we show you the average raw material prices. Starting from average tuna price was $1,283 per ton, or a drop 11% year-over-year in first quarter. The shrimp price was stable year-over-year at THB 149/ kg in first quarter. The average salmon price was declined 23% drop year-over-year. In April, we see the key raw material prices movements still remain in our expectation. Next is on the currencies. In first quarter this year, Thai Baht weakened against EUR and GBP currencies, while strengthened .against the U.S. Dollar. This partly supports our sale growth in first quarter this year. For the three core businesses, this quarter, we saw higher sales portion from pet care and value-added business unit.
The ambient sales portion still at 43%, frozen and chilled seafood at 39%, and pet care and value-added sales at 18%, which is higher from the past quarter at about 15%-16%. Thanks to the strong demand of the pet care business and value-added. We go to details of each business unit. First is on the ambient seafood. The sale declined 13% year-over-year. We already mentioned on the lower tuna sales in U.S. and in Europe. That because partly of the global container shortage and the exceptional sale push in first quarter last year during the first wave of COVID-19. Despite the lower sales, we look at the gross profit margin. It remained high at 20% first quarter this year, versus 19% first quarter last year. This thanks to the lower raw material price. Improving business in sardines, mackerels, and salmon.
The ambient business, we want to highlight on the both sales and margin that we still grew from pre-COVID-19 level first quarter 2019. On the frozen and chilled seafood business, we recover well at 10% year-on-year. We saw food services, particularly in the U.S., improve substantially thanks to the vaccine administration. The gross profit also recovered to 10.5% in first quarter this year. For both sales and margin expand strongly for this business unit compared to pre-COVID-19. Thanks to the business recovery in shrimp, lobster, and we have seen an increase in exports. We explain more about the frozen and chilled seafood. On the left hand, you see that the chart, that the gross profit for this business unit are back to growth already.
First quarter this year, gross profit record THB 1.2 billion, up 44% year-on-year, that also beat first quarter 2019 pre-COVID-19. This are pushed by the strong sales in the U.S. and Thailand. Our strategy, of course, we focus on the modern trade, supermarket, and online channels. We introduced our new value-added products to key customers. For the cost side, we have focused on the cost saving and productivity enhancement. Move to the pet care and value-added. That increased 21% year-on-year. We see the selling volume increase as well. That's because people spend more for their pets since the pandemic. We focus on the higher margin products and new product launch, driven by the innovation. Gross profit margin remains strong at a high level, 27.4% in first quarter. We see the strong demand in both domestic and export products.
Of course, on the top line and the margin, it expand largely compared to the pre-COVID-19 level in first quarter 2019.
Let me just jump in on this one, [Non-English content] Gail, if I may, on this one. Really, this channel and this category is one of the key drivers. You can see here the numbers. I think what I can find very impressive here is the top line graph we have on the top left. You can see since Q1 2019, we moved from THB 4.4 billion and then to THB 5.5 billion. This is really one of the key drivers and one of the key explanation of Thai Union strong performance in Q1, but also the previous quarters. You can see the gross profit margin are very healthy. For TU, we have an average for the whole group, which is around 17%-18% over the last quarters, and we are very happy about this one.
You can see here for this category, which is smaller in terms of size compared to the others, we are delivering around 27% gross profit margin. Keep in mind this category, made up with pet care, value-added, and others also, is highly profitable for us, and we are really willing to push more in this direction. Back to you, [Non-English content] Gail.
Thank you. I think this chart explain what [Non-English content] Ludo said about our past year history on the pet care sales and gross profit margin. We can see that the pet care and value-added sales grew from THB 15 billion in the past five years to THB 20 billion last year with the upward margin trend. The key driver, of course, is the higher demand from the global cat and dog population increase, and that's, of course, the pet food. We also have our own internal factor like automation of our factories and launch of new and innovative products. Our global pet care innovation centers, we continue to explore pet food solution, push new category to the key existing customer. Of course, in Thailand, our key pet food brand is Bellotta.
We're doing quite well, and we donate over 40,000 pet food can during the COVID-19 pandemic. This is the sales portion by geography. Impacting sequentially from North America, thanks to the recovery of frozen and chilled seafood business. We go detail in North America, that sale increased by 6% year-on-year in Thai Baht terms. The U.S. frozen seafood business of lobster and shrimp sales increased substantially, like 60% year-on-year. Also we see the Red Lobster operation also marked the profit in first quarter. This was thanks to the vaccine administration that had promote a favorable environment to the food services in the U.S., Of course, compared to first quarter 2019 pre-COVID-19, the performance in North America remains strong. In Europe, we experienced the sales decline 11% because of lower branded demand across our markets.
Last year, we had the exceptional push from shelf-stable products during the first wave of COVID-19. If you would see compared to the first quarter 2019, European sale remains strong compared to that number, 8.2. Thanks to our strong branded position in Europe market. We move to Thailand. Thailand sale grew by 5% year-on-year, very strong from pre-COVID-19 level, driven by the pet care and value-added business. Lastly, on the geography is emerging market and the rest of the world, we explain the sale increased 3%. Mostly we see a strong sales in tuna segment in Middle East market. However, performance in Asian markets remain challenged compared year-on-year and the pre-COVID-19 level. Overall, this quarter, we deliver consistent high gross margin derived from three core businesses, particular frozen and chilled seafood and pet care and value-added businesses.
Lastly, of course, we maintain our financial guidance for this year. We can highlight a key monitor that would be the global container shortage, the pandemic situation, and also the FX, the currencies. That would be key monitor for investor to look at that. Of course, 2021 guidance is maintained. Lastly, the last slide, we emphasize our Thai Union. We have commitment to the living healthy ocean and the 2025 corporate strategy. This is wrap up our presentation. Now it's Q&A session. Please feel free to submit your questions in the chat box, and our IR team will ask those questions for you.
Here, maybe we start with the questions on Red Lobster. No surprise. I think there are many questions on Red Lobster, and maybe I can take some of them if I may. The first question is, "What do we have in the other income of Red Lobster?" [Non-English content] Gail, can you get back to the details of Red Lobster, please? In the other income, we have two significant components. We have the 8% preferred interest, that we record on the preferred shares, and there is no real change each one quarter-to - quarter. There is only some changes coming from the FX. This is one impact. The second one is we are benefiting from some management fees provided by Red Lobster. You can see here in this chart, this is the line other income.
The amount is very stable, around THB 240 million-THB 250 million every quarter. This is coming from the 8% preferred shares. There is one extra amount in Q1 2021, which is the management fees. In 2020, we did not record any management fees from Red Lobster because we were negotiating with the banks, and you know that Red Lobster was doing its refinancing at that time, and it was not sure that we could get some management fees coming from Red Lobster. In Q1 2021, we finalized the refinancing and we did record a catch-up over 2020 management fees. We did not record our management fees coming from Red Lobster in 2020, and this is why you can see a small increase in the line other income in Q1 2021.
Maybe there are some questions also on the lease accounting adjustment. Maybe here, [Non-English content] Gail, we can go to slide 51. I just want to get back to this one. We try to put. It's not very easy, because it's a very technical question. I'm sorry for that. I just want to share again. What is the lease adjustment? The lease adjustment is basically you are removing the lease operating expenses from your P&L. This is what you can see here with the dark blue on the top. It's a positive impact in your P&L. In U.S. GAAP and also in Thai GAAP, you are basically just replacing these operating expenses by some depreciation and also some finance cost.
If you remember, the key topic for the lease standard is to say we take all the lease and we capitalize this lease in your assets and with a related financial debt, okay? Of course, the asset is called a right of use and then is depreciated, and the financial debt is also generating some financial expenses. You can see here the net impact between the removal coming from the operating lease expenses in the P&L and the new expenses coming from the depreciation and the finance cost. You can see here the yellow line. The yellow line is the impact on the net profit on Red Lobster coming from this lease accounting adjustment. It's a negative impact, and it will remain negative until 2030, okay?
The impact is pretty large, and we mentioned this one, the impact for 2020, 2021 will be roughly THB 100 million per quarter. For the full year 2021, we do expect a THB 400 million expense coming from this one. We have in Q1 2021, the catch up also of 2020 and prior year for THB 200 million. The total impact for the whole year is expected to be around THB 600 million in the share plus. This is very significant. Please keep in mind that we have also some tax credit for 25% of this amount, which will partially offset this amount. I insist it has nothing to do with the real performance coming from Red Lobster. This is, again, a pure accounting difference.
Don't ask me why there is such a difference, it is a fact that there is a small difference in the rhythm of depreciation, which is front-loaded in Thai GAAP and which is not front-loaded in U.S. GAAP. We'll continue. Can you get back to the Red Lobster slide, please, with the details? Moving forward, we will share with you this table where you will see in the first line the share profit coming from the operation, in the second line you will see the share profit coming from the lease accounting adjustment. Okay? The first time you can see here is fully comparable with the past. There is absolutely no change. They have been generating a benefit in Q1 2021 by THB 81 million . Just below, we have the impact on the share profit coming from the lease accounting adjustment.
We have THB 100 coming from Q1 2021, THB 207 million coming from prior year. Moving forward, you will see a -THB 100, roughly, as per our estimate in Q2, Q3, and Q4. There is another question, still on Red Lobster. I try to cover all of them. Does the target to lower loss from Red Lobster by half include the impact from increase in the lease expenses? No, it does not. If you remember, last year we did in Q4 2020, we did communicate to you this target of Red Lobster decreasing their loss by 50%. It was before this information regarding the lease accounting adjustment. Clearly it does not. Right now, our assumption is on the first line, share profit from operations, to have Red Lobster decreasing their losses at least by 50%.
Last year, in 2020, the full year impact coming from Red Lobster was -THB 1.2 billion. We want them to achieve and have a loss of THB 4.6 billion, excluding the lease adjustment. The lease adjustment will come on top. I mentioned for 2021, the total impact on the share of loss is roughly around THB 600 million, THB 200 coming from the prior year, and then THB 100 for each of the quarter. I think overall we are a bit conservative in our assumptions. I think that the share of loss coming from the operations could be much better compared to only half of the losses coming from last year. The Q1 has been really strong.
There is one impact which is a bit difficult for us to appreciate, which is how much of this improvement is coming from the stimulus check and the free money coming from the administration. Overall, we can see really some really good underlying trend. We can see the guest count is increasing, and we can see more and more getting back to the restaurants. This is applicable to us and also to the whole restaurant industry in the U.S. We want to be a bit conservative on Red Lobster. Considering the past we had last year, we say we want to be a bit careful in our approach to them. The news in Q1 are quite good on this one. Next one. Maybe Aimee? Next question.
Sure. I can just pick one, right?
Sure.
We saw some question on the fair value adjustment regarding our business in Russia, the question was, please explain the additional fair value adjustment related to Russia that we recorded in Q1 2021. We told you at the end of last year that we were facing some challenges with our business in Russia, and this is why we recorded this change in fair value in Q4 2020. In Q1 2021, the business is still performing below our expectations, we recorded another 2 million EUR or 73 million Thai Baht change in the fair value. We can now see some kind of stabilization for this business in April, to be confirmed in the following months.
Maybe I take next one. Next one, we have a question regarding a fire situation happening in Germany in April 2021. Indeed here, if you go through our financial statements, you can see in the subsequent events, we have one specific paragraph regarding a new fire unfortunately happening in Germany. This happened in April 2021, so after the closing. We have something like four or five factories in Germany, and there was one fire happening in one of these factories in Germany. If you remember, in 2019 and in 2020, we had two very large fire incidents happening in Germany also, but in a different factory, in our brand-new facility called TUMN. Then last year, we have also a fire destroying one factory in Canada. Now we have in Q1 a very different situation.
The fire incident is much less serious compared to these two large incidents, yet our production in this facility stopped. We have been engaging the discussions with our insurance company on this one. We are sure that the damages will be covered. At this stage today, we don't have any view on the potential damages. It may end up with few hundred or million euro, but it will be fully covered by the insurance. Again, the building are not damaged at all, the equipments are not damaged, but the ceiling is destroyed, and you have also a lot of dust everywhere. We have a lot of decontamination to be performed in the factory. We won't have any significant impact coming from this one. We have two months of finished good inventory before this fire in Germany.
We can use also the other factories in Germany. We can use also other factories in Europe, and if need be, we can use also our own factory in Thailand to help them facing with this issue. The challenge is not a good news for us, is that the third fire which happened in a few years. We know we are in a risky business, and we need to cope with this situation. Okay. I think in Q2, we will be able to provide you with some more details regarding the damages. From a pure operation and finance point of view, we don't expect any significant impact coming from that.
I'll take the next one. What is Ambient business outlook, can we maintain Q1 2021 momentum into the next quarter? Normalization was expected in Q1 2021, and we all know that peak sales from the first wave of COVID-19 last year do not repeat this year. If you compare Q1 2021 versus pre-COVID-19, Ambient grew quite a bit and we're very happy when we compare when the situation was normal, especially when the gross profit margin was at 20%. It is a very good success to us. We remain positive and believe that we have strong plans for the rest of the year.
Next question, we have a question regarding the cash flow. Indeed, we have in Q1, can I get back to the specific slide, please, [Non-English content] Gail? We have in Q1 a very strong profit. We mentioned a very strong OP. Maybe we just get back to the net debt bridge, if I may, okay? You will see in Q1 a very strong EBITDA generated. You can see here in this graph, we have THB 3.4 billion EBITDA. However, we have a highly negative impact coming from the net working capital by THB 2.7 billion. The key drivers for such negative net working capital is an increase of our finished goods and our goods in transit also.
As we mentioned, we are facing in Q1 with some supply chain issues and logistics. There is clearly a delay in our sales in the U.S., in Europe, and also in Asia. We have many product just being on the sea or waiting in the port for some containers. You have an increase of the inventories. At the same time, we have been managing to decrease our inventories of raw materials. We have also a decrease of our account payables. Overall, we have a strong increase of our net working capital by THB 2.7 billion. This is almost offsetting the strong EBITDA coming in Q1. You can see also the impact coming from the CapEx. We have THB 843 million spend in CapEx in Q1. If you remember, we have a target for the whole year of THB 6 -THB 6.5. We are on track.
I think we are slightly late on this one. When we set up this target of THB 6-THB 6.5, we did not have in mind the COVID-19 impact in Thailand. Of course, the peak which happened in Q1 has been delaying some of these amounts. I would expect that we need to see what's happening in Q2 and in Q3. Over the full year, we may not be able to spend exactly the THB 6 billion we are planning. Apart from this one, you can see the other amounts are much smaller. The key drivers really for the negative cash flow are the net working capital and also the CapEx and the interest paid in Q1 2021. I think we are not concerned. We still believe we will generate some cash in 2021, and this is clearly our target.
Clearly, it's a good heads up for us. We'll follow carefully the situation in order to make sure that from a cash situation, we get back to where we want to be in 2021.
Okay, I'll take the next one. Our gross profit margin seems to be gradually eroding since Q2 of last year from 18.2% to 17.7%. If you compare from our track record, 17% and 18% is very strong. 18% last year was all-time high record for us with some exceptional push in Ambient from COVID-19. We are now at 17.7% versus 16.2% last year. We are very happy with this performance.
Maybe I take the next one. Here we have some question regarding the Q2 2021 in terms of revenue, in terms of segments. I think what we can say is you could see the picture in Q1 2021, basically the Ambient category is declining, but this decline in terms of top line is fully offset by the Pet Care, Value Added, and also the Frozen categories. We do expect this positive momentum to continue in Q2 2021. I think we are a bit surprised at the decline in the Ambient category is a bit stronger compared to what we're expecting. On the flip side, the growth on the Frozen and the Pet Care and others is also a bit stronger compared to what we're expecting.
All in all, we are almost on track compared to what we want it to be, but with however, a different portfolio what we have. In Q2, and maybe you get back to the five years graph, if you can see this one. We told you that we have a growth target for the full year 2021, which was between 3%-5%. We maintain this target for the whole year. If you get back to Q2 into Q4 last year, the top line growth was not that high. You can see here, 2.6% in Q2, and then we are just below 2% in Q4. We believe that the growth will mostly happen during this quarter. In Q2 2021, we do expect to have a strong top line growth. This is for the top line story, and we maintain, again, our target of 3%-5% top line growth.
There will be one key driver, which will be, of course, the USD impact. USD is very important for our business. You know that we have something like 40% of our sales in the U.S. Depending where the FX rate, Thai baht versus USD go, we may have some challenge in this top line. We had some issues in January and February, because the actual FX rate was a bit far away from our budget assumptions. However, now it's improving, and right now, the actual FX rate is very close to our budget operation. We need to see how does it flow. Right now, I think we're on good track. We strongly believe that this very positive momentum that we have since four quarters now will continue over Q2, Q3, and Q4. We are very optimistic for the whole year.
Just maybe one word on the gross profit margin. We told you that the gross profit margin was very high over the last four quarters. It will continue in this direction. We don't see any reason to change. Right now, the raw material price are still where we want them to be. Of course, we have some challenges here and there, but overall, they are under control. There will be one topic to keep in mind, which will be the development regarding the logistic cost. We told you since Q4, and that it was impacted negatively our business. In Q4, we told you that we were expecting the situation to improve and to get back to normal at the end of Q2 2021. I think we are now revising these assumptions. We believe this difficult situation from a supply chain point of view will remain until the end of Q4.
We believe the situation will improve, but it improve gradually, and it's much slower compared to what we were expecting. This is maybe the only topic that we need to keep in mind. Overall, the guidance is to say the momentum right now is positive for TU since four quarters, and we believe it will continue in the next quarters. Of course, we're not sure we'll be able to deliver such a high performance in Q1. This is particularly high. You need to keep in mind that part of this one is explained by some FX gain. We have THB 260 million in Q1. This may not repeat again every quarter. If you remember last year, we had some FX loss in Q1, and then after, we had some FX gain in the next quarter. This one, we don't fully control.
Overall, the positive and the outlook is highly positive for our business. Next question. We have one question regarding the situation of Avanti, our associate in India. Of course, you know the COVID-19 situation in India is very challenging. So far, we don't have yet the numbers for Q1. They know they will release the numbers a bit later compared to us, plus we don't have exactly the same year end. However, it seems to be under control. They are facing with some challenges regarding their frozen product. Regarding their feed business, it was okay. I think they had some impact regarding the availability of their workers in Q1, and that's why they have been facing with some challenges in their frozen business.
From the last news we heard, the situation of the feed business was good on this one, but it will have to be confirmed with the numbers. If you remember in 2020, we were very impressed by Avanti's performance, which was very strong and in fact, much better compared to our own performance in the frozen industry. We'll see how it grows in 2021 in this specific context of COVID-19 peak happening in India. We just have one more question also on Red Lobster management fees, in Q1. Here, normally, this one is supposed to be recurring. As I mentioned to you, in 2020, we did not record it. If you get back to 2019 or 2018, normally we were recording this one every quarter. It was a bit different in 2020, because we were renegotiating, and we were refinancing the company.
At that time, we were not expecting the management fees to be paid. Finally, it was concluded in Q1 2021, and we could be managed to be paid for a portion of this one. The 2020, for sure there is a one-off impact happening in Q1 2021 on the payment of these 2020 management fees. Going forward, we will still continue to benefit from these management fees as we have been enjoying since the acquisition of Red Lobster. There is maybe some few more questions. Questions regarding Canada. With the factory, we resume the operation after the fire happening last year. We are right now investigating different possibilities on this one, and one of the possibility is for us to sell our business in Canada. We have different options on the table.
I think there will be more developments and more things to say in Q2 2021 for us. Right now, the direction is not for us to resume the operations there. Just for you to remember, the factory in Canada was mostly sourcing for our lobster business for Chicken of the Sea frozen in the U.S. You can see, in our segment category that the lobster business has been increasing in Q1 2021. What does it mean? It mean that Chicken of the Sea frozen, our frozen operation in the U.S., has been able to replace basically, this Canadian sourcing in Q1 2021. We don't have any concern regarding the long-term operations, and it does not hurt our operation in the frozen channel. Few more questions. Seychelles, we can read some news that Seychelles is locking down again. Will this affect TU's operations? I think you are correct.
We could read also in the past days, some increase in the COVID-19 cases in the Seychelles. It's a bit weird because, I think the vaccination campaign has been very successful in the Seychelles, so we need to see the development over the next days and weeks. With the COVID-19, the situation is highly volatile. We need to manage on a daily and a weekly basis, okay? We need to know that this is our new way of working, okay? You will have some peak of the COVID-19 happening in different location, and this is our role, and this is our task, to try to manage it the best way we can. Until now, I think we have demonstrated that we are very successful in managing our supply chain.
Again, apart from the example of Ghana, which happened for a few weeks last year, we did keep all our factories up and running during the COVID-19, and I think it's a great success. We'll follow carefully the situation in the Seychelles. The vast majority of our workers in Seychelles is vaccinated already with two doses. Now we need to see which variant are we talking about. At this stage, we don't have any impact at all in our production, we need to manage carefully and to follow up over the next days and weeks. Sorry, here we are running a bit out of time. I just take maybe some few more questions, and then we stop. We have one regarding the pet food. What will be the growth momentum for pet food for the rest of the year compared to Q1 2021?
I must say, I am very pleased and very impressed by the performance of our category pet care and value-added in Q1 2021. You can see it is a consistent growth since I think four or five quarters, This is one of the key driver for TU's strong performance in Q1 2021. I am not sure this momentum will remain, It will grow in the same path for the year to go. We have some strong expectation. We have some good plan. We have a very strong portfolio in terms of NPD in the pet food and maybe one next quarter, we can share with you some more example. There are some very funny and good products that we want to launch in this category. The momentum will remain very strong for the rest of the year. Will it grow exactly the same path? I am not sure.
I think it's a bit too early to mention this one. We have been really successful in Q1 2021. We want to continue and to push further, but maybe it will be not exactly growing exactly at the same rate. Can you go up, Nina, please? Maybe I just take the last one, which is on the incremental growth on the reported net profit. What is coming from the FX , what is coming from the fair value, and what is coming from the operations. I think if you get back to our P&L, you will see the increase coming from the OP is something around THB 300 million. OP is very strong in Q1 2021. This is one of the key drivers.
There is a second big explanation for the improvement compared to last year, which is the FX we have in Q1 2021, FX gain around THB 250 million+ . Last year, it was a loss by THB 260 million. Clearly the switch, in terms of FX, is really also one of the key driver for the performance in Q1 2021. They are the two key elements. Operating profit is very strong. FX gain also switch from a FX loss situation to an FX gain situation. If you go line by line, you will see that we have also some good news in the finance interest, in many different line, but these are really the key items. I want to insist again also on the share profit. If you compare to Q1 2021, you don't see a lot of changes.
This one, keep in mind, include also the THB 300 million lease accounting adjustment we have been recording on Red Lobster. If you exclude this one, you will see the share profit is strongly improving, in fact, compared to last year. Anything remaining on this one? Okay. Just get back on the revenue growth target for 2021. I think we mentioned this one. We said, at the end of Q4 that we had a revenue target between 3%-5% for the whole year. For the time being, we maintain this target, and I think Aimee mentioned this one. In Q1, we are flat compared to last year. However, we have some strong expectation and strong plans to generate some growth, especially in Q2 and Q4 2021, where if you look at 2020 performance, we are not growing that much during this quarter.
This is really where we do expect to have some growth. For the time being, we maintain our target sales between 3%-5% compared to last year. [Non-Englsh content] Gail?
Yeah.
I think we should conclude the call.
Sure. Thank you, Mr. Ludovic, for your presentation. Thank you for your interest to join our conference call today. If you have further questions, please feel free to contact IR team. Thank you for joining us today. Have a good one.
Thanks a lot, guys. Thanks also for all your questions. We can see, and we are not surprised. A lot of interest coming from our numbers. Again, we are very pleased with this one. If there are any remaining questions, you can still ask tomorrow. Tomorrow we have the online analyst meeting. Please join this event. We can elaborate more. [Non-English content] Thiraphong will be with us. He will share his own insight. Very pleased with Q1 numbers, and I think this is very encouraging for the rest of the year.
Thank you, and see you again tomorrow. I won't be in the call.
Thanks a lot, everyone.
Yeah, any question, just let us know. Thank you. Have a good one.
Thanks a lot.
Thank you.
Goodbye.
Bye.