October 29, 2012

Pilgrim's Pride reports Q3 2012 net sales of US$2.1 billion

The third quarter 2012 net sales of Pilgrim's Pride Corporation (PPC) record a US$2.1 billion and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") of US$103 million.

The Company recognised net income of US$42.9 million during the third quarter of 2012, resulting in net income of US$0.17 per diluted share. This compares to a net loss of US$162.5 million or an adjusted loss of US$0.72 per diluted share in the same quarter of the prior year. Net debt was reduced to US$1.1 billion in the period, reflecting a year-to-date reduction in net debt of US$317.1 million.

"Our execution of the strategy implemented during the past 18 months has provided for vast improvement in our results, even in an uncertain and volatile environment," explained Bill Lovette, Pilgrim's Chief Executive Officer.

Notwithstanding an over-year increase of US$109 million in feed costs, the positive change in their net income for the first three quarters of 2012 is a swing of US$672 million compared to 2011, owing to cost and yield improvements, pricing strategy changes, enhanced sales mix and a reduction of US$24.6 million in SG&A costs.

The company delivered a year-to-date reduction in net debt of US$317.1 million, and culminated in a solid liquidity position of US$671.5 million, with their lowest net debt position in over five years.

Pilgrim's has bounced back in recent quarters from a particularly difficult 2011, when it posted a streak of losses due to surging feed costs and weak prices for chicken meat during a historically large glut in supplies. The downturn was part of a long-running boom-and-bust cycle that has over many years forced chicken processors to consolidate or shut down.

In August, Pilgrim's sold its commercial-egg operations to Cal-Maine Foods Inc. (CALM), the largest producer and distributor of fresh-shell eggs in the US. The sale included two production complexes with capacity for about 1.4 million laying hens and land located near Pittsburg, Texas. Analysts polled by Thomson Reuters had most recently forecast a profit of US$0.06 a share on revenue of US$1.95 billion.