US poultry producer Pilgrim’s Pride has reported annual losses of over US$496m, as high chicken feed costs continued to weigh on earnings.
For the 12 months to 25 December, the company recorded a net loss of US$496.8m, compared to profits of $87.1m in the prior year. Operating losses amounted to $373.6m versus an operating income of $185.4m a year earlier.
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The company blamed the losses on “extreme grain volatility and increased input costs”.
Sales in the period, however, climbed 9.4% to $7.53bn.
In the fourth quarter, Pilgrim’s Pride again reported net losses, of $85.5m, compared to a profit of $41.8m in the comparable period of 2010. Operating losses amounted to $43m versus an operating profit of $52.3m last year, while sales edged up slightly, by 1.1% to $1.83bn.
“While 2011 was an extremely challenging year, it was also transformational with respect to Pilgrim’s operating model,” Pilgrim’s CEO Bill Lovette insisted.
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By GlobalData“The industry had burdensome levels of finished goods inventories and overproduction in the first half of the year. Additionally, very weak chicken prices relative to costs continued throughout the year.”
Nonetheless, the CEO said that operating model changes within the company, which include realignment of strategy and management structure, will result in “more effective working capital management, an improved cost structure, and a more profitable sales mix”.
