Net sales at pork processor Premium Standard Farms dropped 7.7% to US$224.3m in the fourth quarter, as total volumes fell $22.4m primarily due to health-related issues in the company’s production segment.
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The decline was partially offset by a $2.9m rise in hog and wholesale pork prices and sales and margins growth in the company’s processing unit.
Net income for the third quarter was $2.9m, or $0.09 per share, compared to $13.8, or $0.44 per share for the comparable period last year. Third quarter income includes $2.8m, or $0.09 per share, in costs related to the proposed merger with Smithfield Foods.
“Despite the strength of current live hog and wholesale pork prices, lingering health issues in our production segment and significantly higher feed costs negatively impacted our operating results,” commented John Meyer, CEO and president of Premium Standard Farms.
“We continue to proactively address these health concerns with the implementation of a number of programmes, including the vaccinations we have discussed in previous quarters from which we have experienced positive results.”
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By GlobalDataMeyer continued by pointing to the strength of the company’s processing business. “Conversely, in our processing segment, we were pleased to realize anticipated improvements in both our sales margins, as well as a 12.7% increase in operating income for the quarter,” he commented.
“As we look to the future, we continue to work closely with Smithfield Foods and the appropriate regulatory agencies to complete the proposed merger.”
