US meat group Tyson Foods has said that it expects to increase selling prices in the remainder of the year as it looks to offset continued margin erosion.
The company, which revealed its first-half results today (9 May), said that higher prices and rising demand had offset increasing feed costs during the six months to 31 March.
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First-half sales rose to US$15.61bn in the period, up from $13.55bn last year. Gains were driven by an 11.1% increase in selling prices, while volumes contributed 3.7%.
Profits during the period were boosted by a one-off $11m gain related to the sale of Tyson’s interest in an equity method investment. Profits climbed to $457m in the half, up from $319m for the comparable period of the previous year.
Commenting on the result, Tyson president and CEO Donnie Smith said the company had successfully maintained margins in all of its segments, excluding chicken, by cutting costs and increasing prices.
During the six months, margins remained relatively steady at 5.1%, compared to 4.9% last year.
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By GlobalData“Most exciting to me is that we still have a significant amount of opportunity to increase profitability throughout Tyson Foods. We will continue to face challenging and volatile market conditions in fiscal 2011, but we maintain our belief that earnings should be comparable to 2010 due to our on-going operational improvements and focus on execution,” Smith said.
The company projected full-year sales in excess of $32bn, mostly due to pricing actions.
Click here for the full release or check back for just-food’s insight into Tyson’s first-half.
