On February 14th Seaboard Corporation (SEB) filed SEC Form 10-K reporting results for FY 2022 ending December 31st 2022. The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation. Seaboard owned 50 percent of the equity of Butterball LLC at the end of the first quarter of FY 2022 with warrants to purchase an additional five percent of the shares, expiring in 2025. On April 19th Seaboard exercised rights to purchase additional equity thereby acquiring a controlling interest with 52.5 percent of the equity of the turkey producer.
For FY 2022 SEB earned $580 million on net revenue of $11,243 million with an EPS of $499.60. Comparable values for FY 2021 ending December 31st were net income of $570 million on revenue of $9,229 million with an EPS of $490.36
On December 31
st Seaboard posted total assets of $7,902 million with long-term debt and lease obligations of $1,288 million. Seaboard had a market capitalization of $4,470 million on February 17th. 2023 with 79 percent of equity held internally. The 12-month trailing operating margin was 5.8 percent with a profit margin of 5.2 percent. Return on assets and equity were 5.3 and 12.3 percent respectively. During the past 52 weeks share price has ranged from $3,295 to $4,394 with a 50-day moving average of $3,669.
Effective April 19th 2022 Seaboard was the majority shareholder of Butterball LLC., ranked as the second largest turkey producer in the U.S. The performance of this now-incorporated subsidiary, that produced 850 million tons of RTC product in 2021 from three complexes, is reflected in the $103 income from the Turkey Segment as listed on the Seaboard Corp.10-K submission. For FY 2022 Butterball posted sales of $2,050 million compared to $1,292 million in FY 2021. Operating margin in FY 2022 was 9.9 percent compared to a negative value in FY 20212.. Net income attained $196 million in FY 2022 generating a profit margin of 9.5 percent compared to a loss of $(38) million during FY 2021. As of December 31st 2022 Butterball LLC posted assets of $1,081 of which the Butterball trade name represented $111 million and goodwill and other intangibles, $61 million. Total liabilities for the Turkey Segment attained $406 million.
The 10-K SEC filing included the following statement:- “The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball. The increase in income from affiliate for 2022 compared to 2021 was primarily the result of higher selling prices, partially offset by lower volumes of turkey products sold and higher feed and plant production costs. The decrease in income from affiliate for 2021 compared to 2020 was primarily the result of lower sales volumes and higher live and plant production costs due to increased feed and labor prices, partially offset by higher sales due to increased prices. Management is unable to predict market prices for turkey products or the cost of feed for future periods; however, management anticipates this segment will be profitable in 2023”.