WH Group 2017 annual results published
In 2017, the sales volume of packaged meats increased by 1.5% to 3,285 thousand t. The turnover in the packaged meat sector was $11,777 mill., an increase of 6.3% y-o-y. The operating profit of packaged meats was $1,435 mill., down by 2.7%, as a result of higher raw material costs.
For the China business, the Group was still in the process of transformation, while new products and new distribution channels performed well. Disregarding the factor generated from the exchange rate, the turnover of the China business increased by 0.7% and the operating product was $692 mill. For the US business, the sales volume and turnover of packaged meats increased by 3.3% and 9.6% respectively. After acquiring Clougherty, the inclusion of Farmer John in the Group’s product portfolio contributed remarkably to its results.
In Europe, the sales volume and turnover of packaged meats increased by 10.3% and 8.4% respectively. This was mainly attributable to internal growth, while the acquisition of Pini also made a remarkable contribution to the Group’s business development in Europe.
Through regulating levels of its slaughtering activity and adjusting meat prices in each respective market, WH Group effectively maximized the profit and enlarged the margin of its fresh pork business. In 2017, the total number of hogs processed was 53,782 thousand heads, an increase of 9.1% compared with 2016. The external sales volume of fresh pork during the year was 4,489 thousand t, 8.2% more than 2016. The volume increased in both China and the US at 11.6% and 5.2% respectively. Fresh pork turnover grew 3.8% to $9,526 mill., while the operating profit remained stable at $547 mill.
In China, the Group used improved consumer demand to capture more market share, and improved the utilization of its facilities. With the enlarged sales network, the operating profit in China increased by 5.1% to $103 mill. In the US, hog processing volume was 8.0% higher compared with the previous year, a result of the acquisition of Clougherty and expansion of market demand. Both sales volume and sales price increased during the year, while turnover significantly increased by 11.7% to $4.961 mill. In Europe, the level of hogs processed remained stable and the turnover increased by 24.7% to $677 mill.
The vast majority of the Group’s hog production business is in the US and Europe. In 2017, hog production volume increased by 5.4% to 20,226 thousand heads. The operating profit was $56 mill., compared with a loss in 2016. The improvement of results in both the US and Europe was primarily driven by the rise of hog prices in the local markets.