万洲国际(00288) - 2022 - 中期财报

Financial Performance - Total revenue for the first half of 2022 was $13,398 million, a 0.5% increase compared to $13,331 million in the same period of 2021[7]. - Operating profit rose by 31.6% to $1,211 million, up from $920 million year-on-year[7]. - Profit attributable to the company's owners before biological fair value adjustments increased by 30.1% to $701 million, compared to $539 million in the previous year[7]. - Basic earnings per share before biological fair value adjustments rose by 49.2% to 5.46 cents, up from 3.66 cents in the same period last year[7]. - Revenue for the first half of 2022 increased by 9.4% to $7.073 billion, with a decrease of 3.3% in China, while the US revenue grew by 14.4%[16]. - Operating profit for the first half of 2022 was $1.081 billion, a significant increase of 32.5% compared to the previous year[17]. - Pork revenue decreased by 9.6% to $5.550 billion, with a notable decline of 34.0% in China, while the US and Mexico saw an increase of 18.6%[18]. - Gross profit for the same period was $2,623 million, up from $2,238 million in 2021, reflecting a 17.2% increase[45]. - Net profit for the six months ended June 30, 2022, was $837 million, a 27% increase compared to $659 million in the prior year[46]. - The company reported a total comprehensive income of $578 million for the period, compared to $875 million in the same period last year[46]. Market Dynamics - Pork sales volume decreased by 5.0% to 2,031 thousand tons, while meat product sales volume slightly declined by 0.1% to 1,612 thousand tons[7]. - In China, the total pig output increased by 8.4% to 366 million heads, and total pork production rose by 8.2% to 29.39 million tons[9]. - Average pig price in China dropped by 43.9% to RMB 14.5 per kilogram (approximately $2.24) during the review period[9]. - U.S. average pig price increased by 2.5% to $1.62 per kilogram, reflecting strong domestic demand despite a 3% decrease in overall pork production[10]. - The company reported a significant reduction in pork imports to China, with total imports down by 65.1% to 800 thousand tons during the review period[9]. - The average price of pork in the EU rose by 11.3% to €1.72 per kilogram (approximately $1.88) due to reduced supply[12]. - US pork exports decreased by 22.1% to 1.2 million tons, with exports to China dropping by 55.5%[11]. - The EU's total pork production decreased by 6.0% during the review period, influenced by African swine fever and rising input costs[12]. - The company faced challenges in China due to a slowdown in the consumer market and intense competition, leading to a 1.8% decline in meat product sales[15]. Strategic Initiatives - The company plans to continue expanding its market presence in China, the U.S., Mexico, and selected European markets to maximize profitability[8]. - The company plans to enhance price management across all sales channels to address ongoing cost pressures[16]. - The company aims to focus on pricing strategies, product mix optimization, cost control, and operational efficiency to mitigate profit margin pressures from inflation[40]. - The company plans to increase market investments, accelerate industrial upgrades, and promote a diversified protein development strategy[40]. - The company is actively managing commodity price risks through strategic inventory management and hedging activities[35]. Financial Position and Liabilities - Cash and bank balances stood at $968 million as of June 30, 2022, down from $1.556 billion at the end of 2021[22]. - The current ratio remained stable at 1.7 times, with unused bank financing totaling $4.681 billion[22]. - Total outstanding bank borrowings amounted to $3.919 billion, a decrease from $4.049 billion at the end of 2021[24]. - Financial costs increased by 16.2% to $79 million, primarily due to a higher average outstanding borrowing balance[27]. - The average interest rate on outstanding borrowings was 3.1%, up from 2.7% at the end of 2021[27]. - The debt-to-equity ratio was 39.6% as of June 30, 2022, compared to 41.4% at the end of 2021[26]. - The company maintains a strong credit rating with Fitch at BBB+, S&P at BBB, and Moody's at Baa2, all with stable outlooks[28]. - The company reported a total borrowing of $3,886 million, slightly down from $4,014 million, indicating a decrease of approximately 3.19%[85]. Biological Assets and Capital Expenditures - The company reported a fair value of biological assets at $1.607 billion as of June 30, 2022, up from $1.431 billion at the end of 2021, with a net gain from fair value adjustments of $62 million[30]. - Capital expenditures for the review period totaled $434 million, with significant investments in China for poultry and pig farming facilities[32]. - The company’s biological assets include 14.16 million pigs and 20.33 million poultry, with a 0.2% increase in pigs and a 60.6% increase in poultry from the previous year[30]. Legal and Compliance Matters - The company agreed to pay a total of $77 million to settle various antitrust claims, including $77 million for direct buyers, $42 million for commercial and institutional indirect buyers, and $75 million for consumer indirect buyers[38]. - The company is involved in multiple antitrust lawsuits, including individual claims from buyers and actions initiated by state attorneys general[101]. - The company has faced legal challenges regarding its pricing practices and compliance with sales agreements, particularly in relation to Maxwell Foods[103]. - The company is also defending against claims related to environmental issues from a pig farming operation in North Carolina[104]. Corporate Governance - The board of directors and management committed to maintaining good corporate governance practices throughout the review period[140]. - Mr. Li Gangwei resigned as an independent non-executive director effective June 1, 2022, while Ms. Zhou Hui was appointed as an independent non-executive director and chair of the audit committee on the same date[140]. - The audit committee, consisting of three independent non-executive directors, reviewed the group's interim performance along with internal controls and financial reporting matters[141]. - The company has complied with all applicable code provisions of the corporate governance code during the review period[140].