US meat group Smithfield Foods has revealed that improvements made at its restructured pork business have allowed it to capitalise on growing demand over the first nine months of its fiscal year.
During the nine months to the end of January, Smithfield said that consolidated sales rose to US$9bn, up from $8.2bn last year. Operating profit increased to $828.4m, up from $23.5m booked for the first nine months of fiscal 2009 when the group saw significant losses at its hog production unit.
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Significantly, the company said that operational improvements over the period had allowed it to grow margins quarter-on-quarter. For the nine months, consolidated operating margins rose to 9%, up from 0% for the comparable period of last year. Improvements have accelerated into the third quarter, with margins coming in at 12%, up from just 3% for the third quarter of last year.
“Year to date, our earnings have surpassed that of our last record year, owing to the strength of our restructured pork segment, which has enabled us to fully capitalise on favourable market conditions. Strong global demand for pork, combined with tight supplies, propelled exceptional fresh pork results in the quarter. Smithfield’s highly competitive cost structure and coordinated sales and marketing platform allowed us to deliver another solid quarter in our packaged meats business,” said president and CEO Larry Pope.
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