Dragged by US China’s WH Group Ltd. — one of the world’s biggest pork processors — said “difficult” conditions for its US business are hampering profits and it expects the situation to last through the end of the year. The company on Tuesday reported a 30% drop in profit in the first nine months of the year to $585 million.
The group, which owns U.S.-based Smithfield Foods, said its business in China performed steadily and Europe business achieved recovery in the reported period.
“However, our business in the U.S. continued to be difficult,” the company said in the filing, as elevated grain and energy prices impacted production costs and macro-economic headwinds weakened consumer confidence and hurt demand.
“We expect such unfavorable operating landscape overhang will continue during the remainder of 2023. As a result, the short-term financial performance of our Group will be under pressure,” the company said.
In the US, weak market demand weighed on sales volume of packaged meats, down by 6.8%. High costs of hog production and low sales value of pork products in America also led to an operating loss of $551 million of the company’s pork business in the US and Mexico.