WH Group sees mixed 2015
WH Group sees sales pressure in challenging environment
WH Group, the world's largest pork processor, reported mixed numbers for fiscal 2015 as lower financing costs lifted the bottom line despite issues at its hog unit and lower sales.
Net profit before fair value adjustments increased by 17.5% to US$866m. The Chinese company stressed this level was "beating market estimates". The bottom line was aided by "gradually revealed" synergies with Smithfield as well as lower financing costs. During the period, WH Group paid down some of the high levels of debt it took on to fund the US$7.1bn purchase of the US group in 2013. The company's debt to equity ratio decreased from 77.2% as at end of 2014 to 58.4% as at end of 2015, WH Group revealed.
However, while the company was able to strengthen its financial position, the firm came under pressure in the year from "challenging industry and macroeconomic environments", chairman and CEO Wan Long conceded.
He continued: "However, WH Group's competitive advantages of having a fully integrated business model and effective global management and operations, our business as a whole performed satisfactorily."
During the year sales declined to $21.2bn, versus $22.2bn in the year ago period.
Operating profit was also slightly down, declining to $1.55bn from $1.6bn. The company saw a strong increase in operating profit at its higher margin packaged meat business, where EBIT increased 27.2%. However, this was somewhat offset by lower growth at its fresh pork unit, where operating profit was up 1.3%, and a significant drop at its hog business – where operating profit fell to $54m compared to $412m last year.
WH Group is expected to focus on debt reduction at the start of the forecast period, while also continuing to roll out stronger quality and hygiene controls and checks across its network....
The processed meat category seemed to be the greatest victim when China’s economy slowed in 2014 and 2015, with negative growth overall....
China faced decelerating economic growth at the end of the review period, which resulted in some consumers exercising more caution in their spending....
- Nestle India grows with global, digital innovation
- Analysis: Tyson's shrewd investment in Beyond Meat
- How Nestle tackles Indian challenges - interview
- Lamb Weston goes it alone: six things to learn
- Thailand: convenience to continue to thrive
- Mars launches Maltesers in the US
- Bel takes majority stake in MOM Group
- Campbell backs US nutrition start-up Habit
- Mondelez focuses on margins as sales slip
- Nestle's Buitoni to remove GMOs
- The Big 15: Strategies and Priorities of Top Packaged Food Players in Comparison
- Packaged Food: Quarterly Statement Q3 2016
- Omega-3 in Food and Beverage:Time for a Reboot?
- Global Food Packaging: Innovating for Greater Convenience and Quality Image
- Meat Processing in China - Industry Market Research Report