US POULTRY giant Pilgrims Pride has reported a 25% drop in EBITDA in its Q1 results, compared with the same period the year earlier.
It is despite revenues remaining broadly flat, at $2.72bn in the thirteen weeks to March 31, compared with $2.74bn in 2018.
The earnings report said US operations had improved in the first quarter of this year, after a “challenging market” in 2018, with demand rebounding, particularly in commodity large bone deboning.
Jayson Penn, chief executive at Pilgrim’s said the firm was investing in operations, and “differentiating our portfolio to increase our capacities and capabilities to meet customer expectations”.
He added prices for deboned chicken in the states was higher than a year ago, and close to a five-year average, while wing prices were “near historical highs”.
But the results said European operations continued to be hit by “substantial increase in input costs, including feed ingredients, higher utilities, labour and packaging”.
The firm is the ultimate owner of Moy Park, as well as O’Kanes, and operates businesses in the UK as well as continental Europe.
Mr Penn added: “These increases were partially offset by cost reduction initiatives, synergies and price adjustments some of which have taken slightly longer than expected to be passed on and reflected in customer contracts.
“Despite the impact in results, we expect an improvement month over month as we adjust our prices based on key customer’s contracts and expect the full recovery within our pricing models.”
Mr Penn added the firm’s Mexican operations had seen weaker seasonal markets, but conditions were improving in Q2.