Smithfield boss Pope said revamp of its pork division had been a success

Smithfield boss Pope said revamp of its pork division had been a success

Meat producer Smithfield Foods swing into profit during its fiscal first quarter due to better selling prices in the pork segment and higher live hog prices.

The company posted a US$76.3m net profit for the first quarter to 1 August, against a $107.7m loss in the same quarter last year.

President and CEO Larry Pope said: "The hog production cycle has turned and our fresh pork and consumer packaged meats businesses are delivering solid and consistent earnings, owing to the success of the Pork Group restructuring last year and strong discipline in this segment."

The company said operating margins in hog production improved "dramatically" in the first quarter to $17 a head, an improvement of more than $53 a head compared to the same period last year. In the first quarter last year, the division posted a $180m operating loss compared to a $62.8m profit this year.

"We will continue to focus on maximising margins in our Pork segment, despite comparatively higher raw material costs," added Pope. "The Pork segment will continue to benefit from tight protein supplies, as slaughter levels and freezer stocks continue to be lower year over year. The second quarter is generally a seasonally strong quarter for fresh pork and we expect to deliver solid margins in this segment going forward."

Sales were up 7% on the same period of the previous year to reach $2.9m.

For Smithfield Foods' full results, click here.