WH Group (288) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 declined 6.3% year-over-year to $12.29 billion, mainly due to lower packaged meats and pork sales volumes.

• Operating profit surged 78.4% to $1.14 billion, driven by a turnaround in the pork segment, especially in the U.S. and Mexico.

• Profit attributable to owners rose 81.2% to $694 million; basic EPS before biological fair value adjustments increased to 5.41 US cents.

• Interim dividend per share doubled to HK$0.10, reflecting strong performance and cash flow.

• EBITDA before biological fair value adjustments increased to $1.47 billion, up 37.8% year-over-year.

Financial highlights

• Packaged meats sales volume fell 6.0% to 1.5 million metric tons; pork sales volume dropped 10.0% to 0.8 million metric tons.

• Packaged meats contributed 52.8% of revenue and 99.7% of operating profit; pork business contributed 40.1% of revenue and 8.3% of operating profit.

• Basic EPS before biological fair value adjustments was 5.41 US cents, up from 2.99 US cents year-over-year.

• Net cash flows from operating activities were $689 million, down from $925 million in the prior year.

• Debt to equity ratio was 31.3%; net debt to equity ratio was 23.9%.

Outlook and guidance

• Management expects continued positive impact from U.S. pork business reforms and strong packaged meats performance for the remainder of 2024.

• Packaged meats business anticipated to remain resilient; pork business results expected to grow significantly for the year.

• Macro-economic headwinds and weak consumer confidence may weigh on demand, but cost controls and product mix adjustments will be prioritized.

• Plans to consolidate global resources, focus on price adjustment, product mix, and cost control.

• China: Accelerate channel innovation and digital management; U.S. and Mexico: optimize business structure and reduce hog production; Europe: integrate acquisitions and expand poultry.