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Pilgrim's Pride Shows Large Loss

21 February 2012, at 9:25am

US - Pilgrim's Pride Corporation has reported sales of $1.83 billion for the fourth quarter of 2011, compared with $1.81 billion in the same period for 2010.

However, the Company saw a net loss of $85.4 million for the fourth quarter, resulting in a $0.40 loss per share.

Adjusted EBITDA for the quarter was $22.6 million, and operating cash flows were positive for the same period.

Year-on-year net sales increased by 9.5 per cent to $7.5 billion in 2011, with net income for the year resulting in a loss of $496.8 million.

"While 2011 was an extremely challenging year, it was also transformational with respect to Pilgrim's operating model," said Bill Lovette, Pilgrim's Chief Executive Officer.

Mr Lovette identified some of the challenges Pilgrim's faced in 2011, including the impact of extreme grain volatility and increased cost inputs.

"The industry had burdensome levels of finished goods inventories and overproduction in the first half of the year. Additionally, very weak chicken prices relative to costs continued throughout the year."

"The company's operating model changes include realignment of strategy and management structure becoming a lean and agile team focused on operational excellence, joint value creation with key customers, growth of value added exports and driving ownership and accountability deeper in the organisation.

"This transformation brings forth a goal of more effective working capital management, an improved cost structure, and a more profitable sales mix. Pilgrim's also changes its pricing strategy creating less dependence on one-year fixed price contracts and more reflective of markets," he added.

External impacts on the full year results stemmed from the company's focused inventory reduction efforts in the first half, as well as non-cash write offs of fixed assets, and impairments related to breeder stock during the first three quarters.