WH warns as profit rises 18pc to US$550m

Business | Stella Zhai 12 Aug 2020

Mainland meat processor WH Group's (0288) net profit grew 18.8 percent from a year earlier to US$550 million (HK$4.29 billion) for the first half this year, but the company warned of impacts from mainland flood incidents and the Covid-19 pandemic in the US market.

Net profit after biological fair value adjustments, however, slumped by 44.3 percent from a year ago to US$317 million.

Diluted earnings per share were 2.14 US cents and the company declared an interim dividend of 5 HK cents, the same as a year ago.

Revenue for the first six months this year totaled US$12.48 billion, a 12.2 percent growth from a year ago.

Chairman Wan Long said flooding in southern China had impacted the group's operation in conjunction with other diseases like the African swine fever virus.

He added that the company is not too optimistic for second-half results this year given current uncertainties, and has no acquisition plan or targets.

Chief financial officer Guo Lijun forecast pork prices in the mainland would remain at a high level until the beginning of next year, as the ASF virus and the floods pushed up meat production costs.

Revenue from packaged meat products slid 0.8 percent year-on-year to US$5.84 billion for the first half, with that from the United States dropping 9 percent to US$3.41 billion.

Guo said the operation of the group's five slaughterhouses in the US has been resumed but warns that their production could be impacted by lockdown measures.

This came as President Xi Jinping stressed putting an end to food waste and called for promoting thrift.

Xi stressed enhancing legislation and supervision, as well as establishing a long-term mechanism to prevent wastage, state-owned Xinhua News reported.

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