HONG KONG, April 27, 2017 /PRNewswire/ -- WH Group Limited ("WH Group" or the "Company"), the world's largest pork company, today announced the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the three months ended March 31, 2017 (the "Period").
Highlights
Financial results
During the Period, turnover of the Group was US$5,319 million, up 3.2% when compared with that of the three months ended March 31, 2016. Operating profit was US$418 million, an increase of 2.2% from that of the same period last year. Profit attributable to owners of the Company was US$204 million. Disregarding any biological fair value adjustments and the non-recurrent debt extinguishment costs of US$70 million and related tax of US$26 million incurred during the Period for the refinancing of certain existing indebtedness, the underlying profit attributable to owners of the Company was US$248 million, 10.2% higher than that of the same period last year.
Major achievements
On January 3, 2017, the Group completed the acquisition of Clougherty Packing, LLC from Hormel Foods Corporation for a final purchase price of US$134.6 million. Through this acquisition, the Group added the "Farmer John" and "Saag's Specialty Meats" brands, as well as two processing facilities, three farms, and approximately 2,000 employees. The acquisition will help the Group reinforce and expand its leadership in the global market with a stronger product portfolio, supply chain and sales network in the U.S. West Coast market.
On February 1, 2017, the Group completed the issuance of US$1,400 million aggregate principal amount of senior unsecured notes. Furthermore, the Group entered into agreements for a US$1,000 million of senior unsecured revolving facility and a US$500 million of senior unsecured term loan on February 17, 2017. The net proceeds from these arrangements were used to refinance part of the Group's existing debts to reduce future finance costs and improve debt maturity profile.
Business Segments Discussion
Packaged Meats
During the Period, the packaged meat products segment, which has always been the Group's core business, remained stable with a sales volume of 0.76 million metric tons. Operating profit of packaged meats for the Period decreased by 21.8% from that of the same period last year. The decline was primarily associated with the higher average raw material costs.
Fresh Pork
During the Period, the total number of hogs processed increased slightly by 3.2%, driven by the acquisition of Clougherty Packing LLC. External sales volume of fresh pork during the Period was 1.1 million metric tons, 9.6% more than that of the same period last year. Operating profit rose 8.8% to US$123 million during the Period as the Group was able to foster its sales of competitive imported pork in China.
Hog Production
During the Period, hog production volume increased by 9.2%. The turnover increased by 1.8% from that of the same period last year and the operating profit increased to US$89 million. The increases were primarily driven by the changes in hog prices and the Group's hedging results in the U.S..
Outlook
WH Group Chairman and Chief Executive Officer Mr. Wan Long said: "WH Group achieved solid growth during the first quarter of 2017. We have also accomplished breakthroughs in many areas. Looking ahead to the future, the global political economic climate as well as the industry environment will bring about both opportunities and challenges to us from time to time. We will continue to strive for persisting growth by resources integration, accelerate the development of international trade and promote the coordinated development of the Group as a global enterprise. At the same time, the Group continues to adhere to the global development strategy of 'developing trading platform and business network in a global perspective to form a competitive advantage, to realize further development, and to create long-term value for the Company, employees, society, investors and other stakeholders', to integrate resources continually, and to enlarge scope and improve operations, aiming for business improvement."
About WH Group Limited (HKEx stock code: 288)
WH Group Limited is the largest pork company in the world with the top market share in China, the US and some markets in Europe. It owns many well-recognized and trusted brands and stands above the rest with global market leadership in all key segments of the pork value chain, including packaged meats, fresh pork and hog production. The Group conducts its operations through Henan Shuanghui Investment & Development Co., Ltd., the largest animal protein company in Asia, and Smithfield Foods, the largest pork company in the US For more information, visit www.wh-group.com.
For media enquiries
Hill+Knowlton Strategies
Peter Chan/ Renee Chan/ Judith Cheung
+852 2894 6211/ 2894 6232/ 2894 6235
peter.chan@hkstrategies.com / renee.chen@hkstrategies.com / judith.cheung@hkstrategies.com
WH Group
Christine Wang
+852 2922 0770
christine.wang@wh-group.com