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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Seaboard Q1 Financial Report Includes Continued Butterball Profit

05/13/2023

On May 3rd Seaboard Corporation (SEB) filed SEC Form 10-K reporting results for Q1 of FY 2023 ending April 1st 2023.  The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation.

 

On April 19th 2022 Seaboard exercised rights to purchase additional equity in Butterball LLC thereby acquiring a 52.5 percent controlling interest in the turkey producer.

 

For Q1 2023 SEB lost $16 million on net revenue of $2,499 million with a negative EPS of $(13.78). Comparable values for FY 2021 ending April 2nd were net income of $103 million on revenue of $2,214 million with an EPS of $89.28. The Pork segment was responsible for the loss in earnings posting an operating loss of $(212) million on sales of $428 million.

 

 On April 1st 2023 Seaboard posted total assets of $7,795 million with long-term debt and lease obligations of $1,333 million.  Seaboard had a market capitalization of $4,350 million on May 12th 2023 with 78 percent of equity held internally. The 12-month trailing operating margin was 4.0 percent with a profit margin of 4.2 percent. Return on assets and equity were 3.6 and 9.7 percent respectively. During the past 52 weeks share price has ranged from $3,295 to $4,297 with a 50-day moving average of $3,841.

 

Effective April 19th 2022 Seaboard became 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 approximately 1 million lbs of RTC product in 2022 from three complexes, is reflected in the Q1, $25 million income from the Turkey Segment as listed on the Seaboard Corp.10-K submission. Seaboard provided no information on quarterly sales volumes or financial values in posting.

 

The 10-K SEC filing included the following statement:- “The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC. The increase in income from affiliates for the three-month period of 2023 compared to the same period in 2022 was primarily the result of higher margins, partially offset by lower volumes of pounds sold and $19 million in other non-operating income recorded in the first quarter of 2022. The higher margins were primarily due to a 17% increase in sales prices due to general commodity pricing and a stronger mix of value-added products. The other non-operating income recorded in the first quarter of 2022 primarily included a gain on the sale of business. 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 for the remainder of 2023”.

 


 
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