Pork and beef processor Swift & Co has reported a drop in second-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) from US$44m to $2m, on sales 6% lower at $2.33bn.
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The company said that net sales declined in all three business segments, Swift Pork, Swift Beef and Swift Australia, adding that selling price improvements at Swift Australia and Swift Beef and a volume increase in Swift Pork were more than offset by volume declines at Swift Australia and Swift Beef and a selling price decline at Swift Pork.
The company said that the drop in group EBITDA stemmed almost entirely from EBITDA declines at Swift Beef and Swift Australia, with EBITDA at Swift Pork remaining relatively flat.
In spite of difficult market conditions, Swift & Company said its liquidity position remained strong. “Challenging market conditions prevailed again this past quarter,” said the company’s president and CEO Sam Rovit. “Swift Australia’s profitability continued to suffer because of limited local cattle supplies. Swift Beef’s pricing improvements were unable to offset continued high cattle costs and rising energy prices. In contrast, Swift Pork’s profitability held relatively steady despite a 5% net sales decline.”
Rovit added that the opening up of several important Asian markets, including Japan, Hong Kong and Thailand, would be a positive long-term catalyst for the US beef industry.
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By GlobalDataSwift Beef posted a 4% decrease in net sales to $1.342bn against the second quarter of the previous fiscal year, recording a loss before interest, tax, depreciation and amortisation of $30m, against a loss of $8m in the corresponding period last year.
Meanwhile, Swift Pork generated second-quarter EBITDA of $26m, marginally down from $27m in the same quarter last year, on net sales 5% lower at $541m. Net sales at Swift Australia fell by 13% to $458m, with EBITDA for the quarter declining from $25m to $6m.
