Corporate Profiles - 2024 - 108

COMPANY overview
WH Group
Smithfield Foods spins off European business
as WH Group takes regional approach
W
H Group Ltd. addressed geographic
market differences in 2024, which led
to Smithfield Foods, a subsidiary of
WH Group, spinning off its European operations,
Smithfield Europe, which became known as Morliny
Foods. Smithfield Foods and Morliny Foods
will remain subsidiaries of WH Group.
WH Group also is considering spinning off its
operations in the United States and Mexico and
list the company on the New York Stock Exchange
or Nasdaq. Wan Long, chairman of WH Group, in
July wrote that shareholders and potential investors
should know the move needs approval from
" the stock exchange, the final decision of the
Chairman -
Wan Long
board, and review by the US Securities and Exchange
Commission, and there is no assurance
that proposed spin-off will take place or as to
when it may take place. "
Smithfield Foods includes a majority stake in
Altosano, a joint venture in Mexico that supplies
fresh pork. Morliny Foods supplies fresh pork and
poultry and packaged meats from operations in
Poland, Romania, Slovakia, Hungary, Spain and
the United Kingdom. The company has adopted a
region-specific growth strategy to address a European
market that is more fragmented than the
North American market.
" It's the right time to establish our North
American and European operations as standalone
businesses empowered to execute distinct
108 \ October 2024
strategies addressing different market environments
and opportunities, " said Shane Smith,
president and chief executive officer of Smithfield
Foods. " In doing so, we provide our respective
management teams with increased decisionmaking
agility, optimizing the performance and
prospects for each business. "
Through the six-month period ended June 30,
the businesses in the United States and Mexico
accounted for 54.3% of the revenue and 47.7%
of the operating profit for the WH Group. In packaged
meats in the United States, revenue slipped
0.1% to $3.94 billion from $3.95 billion in the
six-month period of the previous year. Operating
profit increased 6% to $614 million from $578
million. In pork in the United States and Mexico,
revenue fell nearly 11% to $2.71 billion from
$3.04 billion.
Smithfield Foods cited oversupply in pork,
weaker consumer demand and high feed prices to
explain the announcement of plans in December
2023 to close 26 hog farms in Utah.
" Our industry and company are experiencing
historically challenging hog production market
conditions, " Smith said. " Smithfield continues to
take steps to improve operational efficiency and
optimize our hog supply chain. These actions have
included rebalancing production with East Coast
harvest capacity, reducing our sow herd in Missouri
and closing finishing operations in Utah.
These are difficult decisions, but they are necessary
to help our company remain competitive in
this operating environment. "
Smithfield Foods in July 2024 announced plans
to close its Altoona, Iowa, ham-boning facility and
consolidate production volume into existing company
facilities in Monmouth, Ill., Sioux Falls, SD,
and Crete, Neb.
The same month, Smithfield Foods completed its
purchase of a sausage production facility in Nashville,
Tenn., from Cargill, a transaction that played
into Smithfield's plans to grow its value-added
packaged meats segment. The acquisition will add
dry sausage production capacity of 50 million lbs
per year and support dry sausage brands such as
Margherita, Carando and Armour. CP
WH Group Ltd.net income
in millions
2023
$954
2022
$1,365
2021
$1,249
Source: WH Group Ltd.
WH Group Ltd.net revenues
in millions
2023
$26,236
2022
$28,136
2021
$27,293
Source: WH Group Ltd.
WH Group Ltd. share price
Sept. 4, 2024 = $14.52
$10
$12
$14
$16
HIGH =
Aug. 30, 2024 = $14.66
LOW =
Oct. 4, 2023 = $9.69
$8
Sept. Nov.
2023
Jan.
2024
March M Julyay
Source: New York Stock Exchange
WH GROUP LTD.
Sept.
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Corporate Profiles - 2024

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