Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
WH Group Limited ຬݲყϞࠢʮ̡
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 288)
UNAUDITED CONSOLIDATED QUARTERLY RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2018
The board (the "Board") of directors (the "Directors") of WH Group Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the three months ended March 31, 2018 ("Q1 2018" or the "Period"). This announcement is made by the Company on a voluntary basis to enhance the practice of good corporate governance and further promote the transparency and accountability of the Company.
HIGHLIGHTS
Key operating data
Hogs produced (thousand heads)
Hogs processed (thousand heads)
Packaged meats sold (thousand metric tons)
Q1 2018 | Q1 2017 | ||
5,117 | 5,199 | ||
13,945 | 13,027 | ||
794 | 763 | ||
Q1 2018 | Q1 2017 | ||
Results before | Results after | Results before | Results after |
biological | biological | biological | biological |
fair value | fair value | fair value | fair value |
adjustments | adjustments | adjustments | adjustments |
US$ million (unless otherwise stated)
US$ million (unless otherwise stated)
Key financial dataRevenue
5,620
5,620
5,319 5,319
EBITDAOperating profit
516
472
538 561
379
379
418 418
Profit attributable to owners of the Company
249
220
204 218
Basic earnings per share (US$ cents)
1.70
1.50
As at
1.49 1.59As at
March 31, 2018
December 31, 2017
US$ million
US$ million
Total assets
15,450 15,258
Equity attributable to owners of the Company
7,885 7,445
• Revenue increased by 5.7%
• Operating profit decreased by 9.3%
• Profit attributable to owners of the Company, before biological fair value adjustments, increased by 22.1%
FINANCIAL RESULTS
In the Period, revenue of the Group was US$5,620 million, up 5.7% as compared to the three months ended March 31, 2017 ("Q1 2017" or the "Comparable Period"). Operating profit was US$379 million, a decrease of 9.3% over that of the Comparable Period. Disregarding any biological fair value adjustments and the non-recurring net charge of US$44 million incurred during the Comparable Period for Refinancing (see below for details), profit attributable to owners of the Company during the Period was US$249 million, similar to that of US$248 million in the Comparable Period.
INDUSTRY OVERVIEW
As the largest pork company in the world, our business is closely tied with the hog industry in each market that we operate. Supply and demand drive the movement in prices of hog and meat and consequently impact our inputs (costs) and outputs (sales). During the Period, the average hog price in China was RMB13.7 (equivalent to approximately US$2.2) per kilogram ("kg"), a decline of 21.8% from that of the Comparable Period as a result of the increase in market supply. In U.S., the average hog price for the Period decreased by 1.6% to US$1.2 per kg as the effects of increased hog production and slaughtering demand largely offset each other. On the other hand, the pork value in U.S. decreased to a greater extent by 4.9% due to surge in meat supply.
RESULTS OF OPERATIONS
Packaged | Fresh | Hog | |||
meats | pork | production | Others(3) | Total | |
US$ million | |||||
For the three months ended | |||||
March 31, 2018 | |||||
Revenue(1) | |||||
China | 875 | 937 | 2 | 64 | 1,878 |
U.S. | 1,912 | 1,197 | 183 | - | 3,292 |
Europe(2) | 193 | 171 | 15 | 71 | 450 |
2,980 | 2,305 | 200 | 135 | 5,620 | |
Operating profit/(loss) | |||||
China | 169 | 39 | 2 | 4 | 214 |
U.S. | 180 | 11 | (21) | (29) | 141 |
Europe(2) | 13 | 6 | 6 | (1) | 24 |
362 | 56 | (13) | (26) | 379 |
Packaged meatsFresh porkHog production US$ million
Others(3)TotalFor the three months ended
March 31, 2017
Revenue(1)
China U.S. Europe(2)
750 1,825 130
962 1,233 149
3
49 1,764
153 - 3,211
10 55 344
2,705
2,344
166 104 5,319
Operating profit/(loss)
China
U.S. Europe(2)
141 176 6
20 104 (1)
323
123
8 (16) 21 13
(10) 159
(30) 234
(1) 25
(41) 418
Notes:
(1) Revenue refers to net external sales.
(2) Europe denotes mainly our operations in Poland and Romania.
(3) Others revenue primarily represent sales of ancillary products and services. Other operating loss includes certain corporate expenses.
Packaged Meats
During the Period, sales volume of our packaged meats was 794 thousand metric tons, an increase of 4.1% over that of the Comparable Period. Driven by the performance of our premium products, the volume growth in China was 6.1%. Revenue and operating profit of our packaged meats in the Period increased by 10.2% and 12.1% respectively over that of the Comparable Period as we were benefited from higher sales volumes, higher average selling prices and lower raw material costs in various markets.
Fresh Pork
Total number of hogs processed in the Period increased by 7.0%. The increase was mainly attributable to the significant growth of the slaughtering volume in China by 35.1%. Such trend aligned with our strategy to increase market share. External sales volume of fresh pork remained stable at approximately 1.1 million metric tons Operating profit decreased significantly by 54.5% to US$56 million in the Period. Our operating profit in U.S. largely reduced primarily as a result of compression in the spread between hog and pork prices. In contrast, operating profits in China and Europe both recorded considerable growth.
Hog Production
During the Period, our hog production volume decreased by 1.6%. Operating loss was US$13 million in the Period (Comparable Period: profit of US$13 million). The majority of our hog production business is in U.S. and Europe. The operating loss in the Period was primarily caused by the change in hog prices in each respective market. As a result, operating loss in U.S. increased and operating profit in Europe reduced.
ACQUISITION
On 9 January, 2018, the Group completed the purchase of 100% equity interest of two Romanian companies that produce packaged meats ("Acquisition of Elit & Vericom"). The Acquisition of Elit & Vericom is expected to increase our profitability in branded packaged meats and strengthen our leading position in the packaged meats market in Romania.
REFINANCING
In the Comparable Period, the Group completed the refinancing of US$1,400 million in aggregate and incurred a one-off loss on debt extinguishment of US$70 million as well as a related tax deduction of US$26 million. In the Period, the Group benefited from the interest saving as a result of such refinancing.
OUTLOOK
The Group continued to deliver solid results in the Period. Going forward, although the global political economic climate and industry environment will bring both opportunities and threats to us from time to time, we will constantly strive for unceasing growth by resources integration, volume expansion and operational improvement.
REVIEW OF FINANCIAL INFORMATION
The Group's financial information for the three months ended March 31, 2018 is unaudited, but has been reviewed by the audit committee of the Company.
By Order of the Board
WH Group Limited
Wan Long
Chairman and Chief Executive Officer
Hong Kong, April 24, 2018
As at the date of this announcement, the executive Directors are Mr. WAN Long, Mr. GUO Lijun, Mr. ZHANG Taixi, Mr. SULLIVAN Kenneth Marc and Mr. YOU Mu; the non-executive Director is Mr. JIAO Shuge; and the independent non-executive Directors are Mr. HUANG Ming, Mr. LEE Conway Kong Wai and Mr. LAU, Jin Tin Don.
Attachments
- Original document
- Permalink
Disclaimer
WH Group Ltd. published this content on 24 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 April 2018 10:31:06 UTC