For the 13 weeks to 30 September 2018, it recorded US$2.7bn net sales, down from $2.8bn in the same period of 2017. Its EBITDA was down from $463.6m in 2017 to $156m in 2018, marking a 66.3% decline.
Chief executive officer Bill Lovette outlined the business’ performance during the quarter. “During Q3, conditions in the US markets continued to be mixed, with the commodity segment experiencing counter seasonal and weak pricing, whereas the less commodity businesses were better balanced,” he said. “Despite challenging market conditions in commodity chicken, the investments we made over the past few years, the recent acquisitions and our capture of operational improvements, are adding diversification and differentiation to the evolution of our portfolio to deliver a more resilient performance, regardless of specific market conditions.”
He added that its European operations were faring better. “In Europe, the integration is tracking better than expectations and we are slightly ahead of our $50m synergy target for the next two years, supporting a margin increase of 130bps [basis points] over last year.
“The results, given the adverse scenario of feed inputs, are proof of our more stable business model, while our team members improved the operations and contributed to the strong performance by continuing to focus on cost optimisation, cost control, excellent customer relationships, synergy capture and a culture of constant innovation, while still maintaining a consistent margin performance of the business. As part of the integration activities, our team is driving for an increased focus on utilisation of the whole chicken by opening up more opportunities and diversifying into new markets to improve the cutout.”
Lovette highlighted its Mexican operation, which saw a “challenging” quarter, but is recovering.
“Supply in Mexico Q3 grew more than expected as a reaction to strong prices in the first half and also as a result of outstanding growing conditions, impacting market prices,” he said. “Prices are already recovering, and while Mexico can be volatile quarter to quarter, historically our operations have produced very good margin performance on a full-year basis and we expect this trend to continue in the future. Prepared Foods are growing at a double-digit rate and are generating strong results under both premium Pilgrim’s and Del Dia to drive the evolution of our Mexican portfolio towards more differentiated, higher-value products and expanded margins.”