Tyson Foods reports drop in profits

Eurofood, Dec 3, 1998

US food group Tyson Foods, the country's leading chicken processor since its 1997 merger with Hudson Foods, has disclosed that its net profits fell 86% to US$25.1m (ECU21.5m) in the financial year ended 30 September. However, the group's value sales climbed 16.7% to US$7.4bn.

The group, which is gradually assimilating Hudson Foods, had previously earmarked US$142.2m for the funding of a major overhaul aimed at saving US$12-15m after tax every year, and a further US$48.4m was used to make good losses posted on exports to Russia. Without these expenses, the group reported that profits would have been just 3% down on last year.

Export uncertainty

Keen to refocus on core business segments, Tyson Foods has announced plans to close eight factories, with significant job losses. The group will continue to examine ways to streamline its activities, with its seafood arm apparently first in the firing line. The US group also has operations in the ready meals and animal feed sectors.

CEO Wayne Britt said that the group's '99 fiscal year was beginning with some positive elements, such as the dip in the grain price, and an upturn both in domestic demand and in the price of chicken, but that there remain areas of uncertainty on the export front. He added that it was, above all else, the group's pork arm that was subject to trading pressure. Rumours abound that Tyson Foods is considering Europe as a new target market.