US chicken manufacturer Pilgrim’s Pride booked its first quarterly profit since 2010 when it reported its first-quarter results on Friday (27 April).
Net income totalled US$39.6m in the quarter, up from a loss of $119.9m in the comparable period of last year. In the first-quarter of 2011 the result was weighed down by restructuring charges of $1.3m, higher feed prices and the liquidation of inventory.
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Net sales were flat at $1.89bn. However, production costs in the quarter fell 8.5%. Gross margins improved to 5.8%, up from negative 2.8% in the year-ago period. EBITDA totalled $101.5m, which includes non-recurring restructuring charges of $2.9m, the group added.
Pilgrim’s Prde – and the US poultry industry as a whole – must shift toward valuing the whole bird and not relying on high breast-meat prices to carry margins, the company said in its earnings statement.
Volatility in the commodity markets is now the “norm” and must be considered, along with cost controls, as part of production planning, the group added.
“We’ve accomplished a lot over the past year and are clearly headed in the direction we want to be,” CEO Bill Lovette said. “This quarter confirms our belief: The industry can be profitable even at varying grain price points given the right focus on discipline.”
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