WH Group Ltd., a Hong Kong-based company, reported a rise in profits in the first quarter, despite a decline in revenue and sales volumes. Operating profit for the three months ended March 31 increased by 37% to $501 million, thanks to higher pork prices and a series of reform measures that helped reduce losses related to hog farming, slaughtering, and sales of fresh and frozen pork in the US and Mexico.
The boost in profits was attributed to these measures, which helped offset a decline in revenue and sales volumes. The company said its shares rose up to 3.5% before leveling off. The positive outcome suggests that the worst may be over for the company’s North American operations, which struggled with high costs and weak consumer demand last year.
However, WH Group’s profit from pork operations in China decreased by 77% to $9 million due to strong competition in the market. The company has reduced pork production in China, North America, and Europe in response to market dynamics in each region and has optimized its portfolio of packaged meats to address consumption challenges. Looking ahead, the company anticipates that macro-economic challenges may impact consumer confidence and demand, but expects its core business to remain resilient for the rest of the year. WH Group’s performance may also serve as an indication for what to expect from rivals in the pork industry, including Tyson Foods Inc. and JBS SA, which will report earnings next month.
