The Brazilian-owned US poultry processor reported $93.9m in net profit in Q1, which runs from 1 January to 31 March. This marks a 20% drop in profit for the same period a year earlier, but the business was bullish about growth.
It is pitching hopes on the diversity of its product range. Central to this is Pilgrim’s large bird deboning operations, which returned improved results in Q1, thanks to strong exports and rising US demand.
“With summer grilling season nearing and a supportive export environment, we expect profits for our large birds to further increase, given the improved cutout,” said Bill Lovette, CEO of Pilgrim’s Pride.
“Our exposure to multiple bird sizes through our well-balanced portfolio will provide an opportunity for us to capture the improvement in performance across all bird segments.”
Pilgrim’s Pride said sales increased in line with company expectations, improving sequentially from the fourth quarter of 2016, driven by strong results in the US.
Mexico was “solid” according to Lovette, who bemoaned a “less favourable” foreign exchange climate that hit costs in one of the chicken producer’s primary markets.
Overall net sales generated just over $2bn, rising by more than 2% year-on-year.
New product development
In November last year, the poultry producer confirmed plans to acquire branded chicken firm GNP Company in an all-cash deal worth $350m. Providing an update on the now-complete acquisition, Lovette said the deal could add $20m a year in financial improvements to the firm.
He said the additional benefits from the GNP acquisition put the company at an annual run-rate of $30m.
“We already started to grow and leverage our combined product offerings,” said Lovette. He confirmed Pilgrim’s has introduced a new line of fully-cooked sausages under GNP Company’s food brand Gold’n Plump. Pilgrim’s hopes the new product development will complement Pilgrim’s antibiotic-free, veg-fed, fully-cooked line of artisanal chicken sausages also launched recently.
The business has also revised its capital investment target, which now stands at $250m, up by $20m.