Smithfield Foods, the US pork producer owned by China’s WH Group, reported a leap in third-quarter earnings on higher meat prices and increased packaged sales.
The company said net income rose to US$155.3m in the three months to 28 September, up from $35.4m a year earlier. Consolidated operating income increased 218% to $280.1m.
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Sales climbed 11% to $3.7bn. Hog volumes dropped 9% due to the porcine epidemic diarrhoea (PED) virus but margins improved on higher selling prices. Volumes were also up at its packaged food business, Smithfield said.
President and CEO Larry Pope said: “Momentum in our value-added packaged meats business continues to accelerate. Margins were resilient in the face of extremely high raw material costs and we realised volume, market share and distribution gains across a number of our core brands and strategic product categories. These developments underscore the evolution of Smithfield into more of a branded packaged meats company.”
Pope added the group expects to see “modest” pork production expansion in 2015, with lower prices expected to spur export demand. “Our cost structure should benefit from a record large US corn and soybean crop.”
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