WH Group brings home the bacon

Kelly Chow

WH Group (0288) saw its first-half net profit before fair value adjustments surge 81 percent to US$694 million (HK$5.41 billion) thanks to improved pork business, with its interim dividend doubling to 10 HK cents.

It attributed the significant growth to the substantial improvement of its US pork results due to more favorable market dynamics and reformed measures to strengthen hog production operations.

But revenue dropped on soft demand by 6.3 percent to US$12.29 billion.

The turnaround had been primarily due to higher pork prices, lower feed costs, enhanced efficiency of farming and slaughtering, effective cost controls and the recognition of certain employee retention credit, the group said.

The company's core business, packaged meats, amounted for 99.7 percent of operating profit and 52.8 percent of revenue.

External sales of pork was 1.82 million tonnes in the first half of the year, down by 10 percent year-on-year, as a result of a decrease in processing volume from China and the US.

Although macroeconomic headwinds are weighing on consumer confidence and demand, WH said it will adjust its product catalogue, expand its sales network, manage prices and save costs in order to adapt to an ever-changing market environment and overcome various challenges.