WH Group posts 7.2 per cent jump in 2021 profit on higher sales, but outlook clouded by Ukraine-Russia war
- Owner of US-pork giant Smithfield Foods reports profit of US$1.04 billion for 2021
- WH Group will try to maintain scale and profitability despite rising costs, says CEO Guo Lijun
WH Group warned on Monday that the Ukraine-Russia war will push costs up and affect its profitability, after the world’s biggest pork producer reported a 7.2 per cent jump in profit for last year on higher sales.
The company said it expected hog prices in the US to remain lower this year compared with last year, while in China it expects prices to remain low in the first half before trending higher in the second half. In Europe, however, it expects prices to remain high because of a range of factors, such as the African swine flu and rising feedstock prices because of the war.
Commodity and energy prices, which have risen considerably since Russia invaded its neighbour more than a month ago, have pushed food prices higher and could affect demand.
“Last year, we saw an impact from the African swine flu, Covid-19 pandemic and a number of abnormal fluctuations in the market,” said CEO Guo Lijun said during an earnings call on Monday.
Guo added that while the company faces challenges on many fronts because of higher commodity prices and rising costs, he was confident that “we will maintain our scale and profit level” this year.
Guo was named WH Group’s CEO in August last year following a family feud involving the company’s 81-year-old founder Wan Long, and his 52-year-old son Wan Hongjian, who was fired two months earlier for misconduct.
While the Russia-Ukraine war is likely to push operating costs higher, WH Group said it was taking action to control costs. However, it did not elaborate.
