FAST NEWS: WH Group’s profit sliced in half on rising U.S. costs

The latest: Pork producer WH Group Ltd. (0288.HK), owner of the Smithfield brand in the U.S., said on Monday it expects to report its unaudited profit before biological fair value adjustments dropped 56% year-on-year. Based on a profit of $395 million in the same period last year, its profit for the first quarter would be about $174 million.

Looking up: The company’s U.S. sales are expected to pick up steadily as inflation moderates and consumer demand recovers following the end of the pandemic.

Take Note: The company said gross margins fell for its U.S. operation as hog costs continued to rise while pork prices were affected by weak demand.

Digging Deeper: Listed on the Hong Kong Stock Exchange in 2014, WH Group is the world’s largest pork company, with the largest market share in China, the U.S. and Europe, and a complete pork chain that includes pig farming, fresh pork, pork products, distribution and sales. Last year, the company reported record revenues of $28.1 billion, of which 33.9% came from the domestic Chinese market and 56% came from the U.S. and Mexico.

Market Reaction: WH Group’s shares fell on Tuesday, closing down 0.9% at HK$4.62 by the midday break. The stock now trades near the lower end of its 52-week range.

Translation by Jony Ho

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