Keystone Foods’ net revenue down 1 percent in Q4 2017

Keystone Foods saw its net revenue drop 1 percent to $705 million during the fourth quarter of fiscal year 2017, Keystone’s parent company, Marfrig Global Foods, announced.

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Phongphan | Bigstock.com
Phongphan | Bigstock.com

Keystone Foods saw its net revenue drop 1 percent to $705 million during the fourth quarter of fiscal year 2017, Keystone’s parent company, Marfrig Global Foods, announced.

The slip in revenues was partially attributed to disruptions throughout the supply chain caused by hurricanes and unseasonably cold weather, as well as downtime associated with production modifications that will later improve operational flexibility and efficiency.

Speaking during Marfrig’s year-end earnings call, Keystone CEO Frank Ravndal said during the past quarter, Keystone Foods experienced strong customer demand as its key quick service restaurant (QSR) customers performed well.

“The food service channel was particularly strong during the quarter as some of the leading QSR brands, which are Keystone’s biggest customers, are significantly outperforming their peer group. These QSRs are increasing both store traffic and average check size through value promotions and by adopting new technologies and approaches like home delivery,” Ravndal said.

While Keystone Foods, which is the tenth largest broiler company in the United States, saw a small revenue decline for the fourth quarter, its net revenue for the full year increased 3.2 percent to $2.78 billion.

Volume for fourth quarter

Keystone’s volume also saw a year-over-year drop for the fourth quarter. Its volume of 289,000 metric tons dropped five percent. However, Keystone Foods’ volume for its most recent quarter was the second highest it had ever been during a fourth quarter, trailing only that of the 2016 fiscal year.

According to Ravndal, its volume in the food service channel for the quarter increased by four percent, but that gain was more than offset by decreases in volume for the retail, convenience and industrial channels.

Volumes increased by 3 percent in the Asia Pacific, Middle East and Africa (APMEA) markets, driven by strong foodservice growth.

IPO still a possibility

Marfrig Global Foods in 2017 had announced plans for a possible initial public offering (IPO) of its Keystone Division, with hopes of it occurring before the end of the year.

An IPO has not yet happened, but Marfrig CEO Martin Secco Arias said while he cannot say much about the situation, an IPO remains “an alternative for us.”

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