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Pilgrim’s Pride Reports on Q2 of 2020

07/30/2020

In a press release dated July 29th Pilgrim’s Pride Corp. (PPC) announced results for the second quarter of FY 2020 ending June 28th.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)


Fabio Sandri CFO and interim CEO

2nd Quarter Ending

June 28th 2020

June 30th 2019

Difference (%)

Sales:

$2,824,023

$2,843,085

-0.6

Gross profit:

$119,859

$367,864

-67.5

Operating income:

$27,289

$279,550

-90.2

Pre-tax Income1

Net Income

$(9,356)

$(6,400)

$245,627

$170,080

-103.8

-103.8

Diluted earnings per share:

$(0.02)

$0.68

-102.9

Gross Margin (%)

4.2

12.9

-67.4

Operating Margin (%)

1.0

9.8

-89.4

Profit Margin (%)

-0.2

6.0

-103.3

Long-term Debt:

$2,615,951

$2,276,029

+14.9

12 Months Trailing:

Return on Assets (%)

5.8

Return on Equity (%)

19.0

Operating Margin (%)

5.4

Profit Margin (%)

3.7

Total Assets

$7,156,581

$7,102,364

+0.8

Market Capitalization

$3,820,000

Note1: Includes $5.5 million in beneficial foreign exchange in Q2 2020,: $2.5 million Q2 2019.

52-Week Range in Share Price: $15.12 to $ 33.67 50-day Moving average $16.88

Market Close: Wednesday 29th July 16.21 Thursday 30th July, 10H00 post-release $15.52

Forward P/E 7. 0

In commenting on results interim CEO Fabio Sandri stated “In the U.S., the first half of Q2 the market was significantly challenged before a gradual loosening of travel and movement restrictions due to Covid-19 drove an improvement in channel demand, especially from foodservice. Similar to Q1, large bird deboning was once again the most volatile this quarter, with quick moves between the lows and the highs, and remained challenging compared to 2019. Operationally however, we continue to improve our relative performance versus the industry across all our business units, including in large bird deboning. We also continue to adapt quickly to changes in channel demand by adjusting the mix of our production capabilities, supported by our close partnerships with Key Customers, strong focus in execution by our team members, the geographical diversity of our footprint, and our presence across all bird size categories.”

 

Referring to operations in Mexico Sandri opined “ Mexico remained challenged as the effects of weak macro conditions, which added to uncertainties in consumer spending, have persisted. In addition, the Peso continued to be weak putting additional pressure on the results. Industry prices were also below seasonality, driven by much better than expected growing conditions, before reverting closer to normal levels by the end of the quarter. Our increased share of non-commodity products, strong execution, and growth in Prepared Foods has also helped to partially offset the softness.”

Referring to EU business Sandri commented “our legacy European operations performed in-line with last year, driven by strong retail demand and despite the significant impact of Covid-19 on the operations, as our strong internal operating performance and improved SG&A management helped in mitigating the difficult environment. The improvement in results from the newly acquired European assets has been maintained, with positive EBITDA continuing to increase. The performance was driven by strong demand at retail partially offset by a reduction in foodservice, continuing strength in pork exports especially to China, as well as the implementations of operational improvements and synergy capture.”

 

The Company did not address the indictment of CEO Jayson Penn and a subordinate on Federal criminal charges of collusion and anti-competitive activities.