March 29, 2022

WH Group reports higher profits thanks to sales in the US and Europe

Major pork processing firm WH Group Ltd announced a 7.2% increase in its annual profits to US$1.043 billion, thanks largely to higher sales in the US and Europe, Reuters reported.

The group's revenue increased 6.7% last year to US$27.29 billion. WH Group owns US-based Smithfield Foods, the biggest pork processor in the world.

WH Group also announced 1.3% higher packaged meat sales to 3.32 million tonnes in 2021. This is its core business.

The group's sales volume in China fell 1.6% in a consumer market lacking growth momentum. Swine prices in China have declined as farmers steadily rebuild herds devastated by an African swine fever outbreak, but COVID-19 has badly affected demand for the meat.

WH Group said swine prices in China will remain low in the first half of this year, but is expected to rise in the second half of 2022. Most analysts said prices will remain low throughout 2022.

Soaring commodity prices and higher production costs will remain a challenge, said the group, with the pandemic affecting its import and export business. One executive said there are longer shipment cycles, customs processes, and higher costs.

Shuanghui Development, WH Group's China business, reported a 22.2% drop in net profit to CNY 4.87 billion (~US$764.69 million, CNY 1 = US$0.16) due to lower swine and pork prices, adding that profit from frozen products and pork imports had declined.

Shuanghui Development recently published an apology about food safety issues at one of its plants.

-      Reuters