Profit warning on large pig integration

The profit of Guangdong Wen's Foodstuff (Wen's) has fallen sharply in the past year. China's largest pig integration says net profit is more than 40% lower than in 2016.

Wen's estimates net profit for 2017 between 6,6 and 7 billion Chinese yuan (1 yuan = €0,12). The reason for the sharp decline is the lower meat prices for pigs and poultry. Due to the bird flu outbreak in China, the price of poultry meat was about 30% lower.

Pork important
The decline in pork prices (-18,6%) also contributed to Wen's lower profits. This despite the fact that the meat company turned over more volume. The sale of pork accounts for three quarters of the turnover. The rest comes from the sale of poultry meat.   

With approximately 1 million sows, Wen's is the largest pig integration in China and the second largest in the world. WH Group/Smithfield has 1,35 million sows, making it the world's largest pig integration. However, this Chinese/American company has spread production over several countries.

Wouter Job

Wouter Baan is Head of Meat & Dairy at BoerenbusinessAt DCA Market Intelligence, he focuses on dairy, pork, and meat markets. He also monitors (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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