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WH Group Limited, the world’s largest pork company, today announced the results of the Company and its subsidiaries for the nine months ended September 30, 2019.
Highlights of Results for the First Nine Months
- Revenue increased by 3.7% to US$17,193 million
- Operating profit increased by 7.2% to US$1,295 million
- Profit attributable to owners of the Company, before biological fair value adjustments increased by 8.5% to US$820 million
Financial Results
Since the beginning of 2019, WH Group has proactively adjusted its business strategy, bringing into full play its advantages of having a vertically integrated business model and diversified geographic presence. Its business performance improved quarter by quarter, with a significant increase in the third quarter. For the first nine months of 2019, revenue of the Group increased by 3.7% to US$17,193 million. Operating profit grew by 7.2% to US$1,295 million. Profit attributable to owners of the Company, before biological fair value adjustments, increased by 8.5% to US$820 million.
In the third quarter, WH Group’s operating profit increased by 54.8% to US$529 million (US$342 million in the third quarter 2018) and profit attributable to owners of the Company, before biological fair value adjustments, increased by 79.8% to US$357 million (US$199 million in the third quarter 2018).
Performances of Business Segments
Packaged meats
For the first nine months of 2019, volume growth of our packaged meats was 0.3%. Revenue increased by 0.6% to US$8,893 million. Operating profit decreased slightly by 1.3% to US$1,144 million as the margin in China was adversely affected by the soaring raw material costs. However, operating profit in the U.S. and Europe was notably up by 8.1% and 17.9% respectively due to enhanced product mix and improved operating efficiency.
Fresh Pork
Total number of hogs processed in the Review Period was similar to that of the same period last year as the increase in Europe led by capacity expansion was offset by the decrease in China resulting from the stringent hog supplies amid the spread of African 2 swine fever (ASF). External sales volume of fresh pork was 3.5% lower than the comparable period of 2019 as we adjusted our operating strategy. Operating profit increased by 13.0% to US$156 million in the Review Period. The growth driver was our operation in China, which rose significantly by 54.0%, as we benefited from our competitive edges in national presence and good inventory management.
Hog Production
In the Review Period, our hog production volume increased by 6.5%. Operating profit was US$70 million (comparable period of 2018: loss of US$43 million). The turnaround was mainly driven by the higher hog prices and favourable hedging results in the U.S. during the Review Period. Our operating profit in Europe also increased as it had benefited from the price hike caused by the spread of ASF in China and Europe. Operation in China, however, was negatively impacted by ASF as cost structure was worsened.
Outlook
WH Group Chairman and Chief Executive Officer Mr. Wan Long said: “Since the beginning of this year, WH Group has faced unprecedented challenges due to the ASF and trade disruptions. Our performance has highlighted the Group’s advantages and resilience capabilities. Looking forward, we will proactively adjust our business strategy based on the market situations to achieve steady growth. We believe the Group will further consolidate its global position by adhering to our strategies. ”
October 28, 2019 - WH Group
