WH Group, the China-based meat processor and owner of US business Smithfield Foods, saw sales and profits rise in the first half of its financial year, with earnings from its fresh pork arm rising rapidly.
The company, listed in Hong Kong, booked net profit of US$551m for the six months to 30 June, a jump of 81.8% on the first half of 2015. Operating profit rose 15% to $838m.
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Growth in WH Group’s turnover was less pronounced, with its top-line expanding 2.4% year-on-year to $10.45bn.
WH Group’s largest division by turnover and operating profit is packaged meats. It saw turnover inch up 0.7% to $5.34bn and operating profit grow 5.5% to $769m.
Packaged meats sales in China fell 6.6% to $1.65bn, although the division saw sales in the US increased 4.5% to $3.4bn. The division grew its profits in China and the US.
The business saw stronger growth from its fresh pork division, where turnover was up 9.9% at $4.59bn and operating profit rising from $58m in the first half of 2015 to $191m.
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By GlobalDataWH Group saw sales of fresh pork jump 51.5% in China to $2.13bn, although it reported a 12.2% fall in fresh pork sales in the US to $2.2bn.
However, profits from fresh pork fell in China in the first half of the year, with WH Group insisting it became “more challenging” to pass on the rising costs of hogs to consumers.
In the US, profits from fresh pork were up over ten-fold. “The great enhancement in profitability was primarily due to our success in capturing the higher value of meat such as bellies and hams, in conjunction with a relative lower cost of hogs,” WH Group said.
Meanwhile, the first half of 2016 saw WH Group launch Smithfield-branded, US-style bacon, ham and sausage products that had been produced in China.
