Meat&Poultry - July 2011 - 14

Success is a Matter of System

Business Notes
JBS Australia beef plant to shut down
JBS Australia’s Beef City plant was expected to temporarily shut down July 1, reportedly because of a decrease in demand from customers in Japan. The plant employs approximately 1,100 workers who were told operations at the plant would cease for at least two weeks, according to news reports. Japan accounts for more than 80 percent of Beef City’s sales and while cattle supply was sufficient, grain-fed orders had stalled, according to reports. Eligible plant workers will be able to access their holiday and long-service leave during the shutdown. Anyone not having entitlements may be able to access state and federal government assistance payments. Meanwhile, 50 positions have been made temporarily available at another JBS Australia-owned plant at Ipswich. ■

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Smithfield 4Q, FY 2011 net income, sales rise
Smithfield Foods Inc.’s shift to focus on packaged meats, strong global pork demand against tight supplies, lower hog inventories, favorable grain hedges and higher live hog market prices, all came into play to yield fiscal 2011 net income of $521.0 million – an improvement of $622 million over last year’s results. EPS of $3.12 was a record high for a fiscal year, consolidated operating profit improved more than $1 billion and consolidated sales increased 9 percent to $12.2 billion for the year. The company’s Pork Segment produced record operating profit for the fourth consecutive year. Pork earnings increased 40 percent, Fresh Pork operating profit improved $345 million and Packaged Meats results remained strong at $347 million. Smithfield’s Hog Production segment operating results increased $764 million. Robust demand for US pork exports led to significant margin expansion in fresh pork complex. Fiscal 2011 fourth-quarter net income was $98.4 million, or $.59 per diluted share, an improvement of $103 million; adjusted EPS of $.85 was record high for the fourth quarter, the fourth consecutive quarter of record year-over-year earnings and consolidated sales increased 7 percent to $3.1 billion. Consolidated operating profit improved $227 million. Pope Smithfield’s Pork segment produced record fourth-quarter operating profit. Pork earnings increased 77 percent, Fresh Pork operating profit improved by $106 million and Packaged Meats results remained strong at $80 million. Hog Production segment operating results increased $171 million. Strong export demand continued, particularly from Asian markets “Looking forward to fiscal 2012, we expect to improve our packaged meats business and are committed to maintaining strong pricing discipline to deliver margins in our normalized range,” said C. Larry Pope, president and CEO. “One of our top priorities this year is to achieve profitable top-line growth in our consumer packaged meats business, which will be fueled by increased consumer marketing of our key brands. Balanced supply and demand and strong exports should yield solid fresh-pork margins, although we anticipate that profitability will return to more normalized levels.” Smithfield’s board also approved a $150 million share repurchase program. ■

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14 • Meat&Poultry • July 2011 • www.MeatPoultry.com

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Meat&Poultry - July 2011

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