Quarterly profits at Smithfield Foods have fallen after hog costs and lower sales in key export markets hit the US group’s fresh pork operations, its largest business.
Smithfield booked net income of US$39.5m for the three months to 28 July, down from $61.7m last year. Operating profit dropped from $131.8m to $97.3m.
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The company, which has agreed to a takeover offer from China’s Shuanghui International, saw fresh pork sales increase but losses from the unit more than trebled to $36.5m.
“The operating environment in fresh pork and our international business was difficult in the first quarter. Normal seasonal weakness in fresh pork was exacerbated by declines in key export markets, namely Japan, as well as China and Russia,” CEO Larry Pope said.
Smithfield shareholders are set to vote on Shuanghui’s $7.1bn takeover bid later this month. However, this week, a key investor critical of the deal claimed it has received indications of interest from rival suitors that could lead to a transaction that would give more value to shareholders.
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