Smithfield Foods, the US-based meat processor, has reported a fourth-quarter loss of almost US$79m, deepening its losses over the fiscal year.
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The company booked a net loss of US$78.8m for the three months to 3 May as losses from its hog production unit continued. The result compared to net income of US$2.4m a year earlier.
Across the full fiscal year, Smithfield posted a net loss of US$190.3m against net income of US$128.9m a year ago.
Smithfield’s sales were flat during the fourth quarter, reaching US$2.85bn. Its quarterly turnover, however, was up 10% to US$12.49nbn.
Record feed costs had weighed on Smithfield’s hog production during the year, although the group said it expects costs to “moderate”.
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By GlobalDataNonetheless, president and CEO Larry Pope said Smithfield would gain cut its US sow herd in a bid to boost returns.
“Smithfield has already reduced the size of its US herd by 2m market hogs annually, and we are initiating a further reduction of 3% of our US sow herd, effective immediately,” Pope said.
“This reduction, combined with the additional cuts by our fellow producers should shrink supply to a point where the industry can return to profitability. This liquidation is long overdue.”
Pope said Smithfield’s pork business had achieved record profits, once restructuring costs were stripped from the numbers.
However, Smithfield saw earnings from its international businesses fall by more than half to US$34.9m. Weak demand in Western Europe hit earnings in the region and currency losses weighed on profits in Poland.
Smithfield shares were down 1.6% at US$11 at 09:44 EST.
