Pilgrim’s Pride reported its financial results for the first quarter of fiscal year 2018, which included a 27.1 percent year-over-year increase in net income.

The company’s net income was $119.4 million for the thirteen-week quarter ending April 1.

Pilgrim’s also reported net sales of $2.75 billion, an increase of 10.8 percent when compared to the same quarter of the 2017 fiscal year.

Other highlights for the quarter include:

  • Consolidated numbers reflect Moy Park for the entire quarter, including historical data in accordance to U.S. GAAP.
  • Operating Income margins of 6.9 percent in the U.S., 14.6 percent in Mexico and 3.9 percent in Europe operations, respectively.
  • Adjusted EBITDA of $271.8 million (or a 9.9 percent margin), or 18.9 percent higher than last year and Adjusted EPS of $0.53, or a 39.5 percent increase.
  • Recent acquisitions and investments both in U.S. and international are already generating value and improving portfolio by adding more differentiated products while key customer approach has continued to produce growth and margin expansion beyond the underlying market conditions.
  • Mexican operations exceeded expectations driven by normalization of the market’s logistics and infrastructure disruptions caused by natural events. Diversification into premium Pilgrim’s brand is gaining momentum and producing great results.
  • Successful refinancing of the Moy Park bonds, impacting the interest in the quarter but with strong support from market and favorable terms for future benefits.

“For Q1 our U.S. operations continued to deliver solid performance, especially within the small-bird and case-ready businesses. Our big bird deboning experienced a soft start as prices remained unseasonally low through the first half of the quarter but prices recovered quickly and returned closer to normal seasonality. Despite some headwinds in feed, labor and logistics, the investments we made over the past few years, together with the recent acquisitions and our capture of operational improvements, helped us to generate consistent results and continued to contribute to the evolution of our portfolio in supporting our vision to become the best and most respected company in our industry,” stated Bill Lovette, chief executive officer of Pilgrim's.

Mexican operations

“We had a very strong performance at our Mexican operations in Q1 as the prior logistics and infrastructure dislocations caused by natural events normalized and demand returned at strong levels,” Lovette stated. “Our volumes increased during the quarter, driving a very strong EBITDA performance that was not only well above the level from a year ago but also above initial expectations. The strength has continued, which we see as the continuation of the trend of a strong, growing market for chicken. Our Prepared Foods are growing at a double-digit rate and are generating great results under both premium Pilgrim’s and Del Dia to drive the evolution of our Mexican portfolio towards more differentiated, higher-value products, and ultimately margin expansion.”

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European operations

“In Europe, we are already seeing positive results from the integration, with significant share gained at a key customer and several other projects to further optimize our relationships, highlighting how our newly acquired operations are already benefiting from our team’s enhanced focus on key customer strategy,” Lovette said. The operational improvements initiatives are also going well and we are slightly ahead of our $50 million synergy target for the next two years. Based on the success of the previous integrations, we continue to believe we have the method and the team to continue to grow the profitability and potential of our European business.”