May 11, 2006

Gold Kist makes net loss of US$16.2 million for Q2 2006

Poultry processor Gold Kist reported a net loss of US$16.2 million for the second quarter of 2006 compared with net income of US$38.7 million for the second quarter of fiscal 2005.

There was a 6.7 percent decline in sales to US$532.4 million compared with net sales of US$570.8 million for the second quarter ofl 2005.

Unfavourable conditions prevalent in the first quarter of fiscal 2006 persisted through the second quarter, said Gold Kist President and CEO John Bekkers.

Bekkers said broiler prices declined 9.4 percent in the second quarter and 5.7 percent for the first half of fiscal 2006 compared with the same periods in fiscal 2005.

Bekker attributed the poor prices to low consumption in export markets abroad due to bird flu. The decline led to increased domestic supplies and pushed prices down.

Processing costs increased due to more meat being processed. Higher feed, utilities, freight and packaging costs also added to the company's burdens, even through soymeal costs were lower.

Bekkers said the range of value-added products would be expanded and would remain the focus of the company. This category accounted for more than half the sales for the six months of 2006.

Gold Kist has been ranked one of the top 20 meat processor in the US.