WH GROUP(HK:00288)2023-03-28 08:50Financial Performance - WH Group Limited reported a 3.1% increase in revenue to $28,136 million for the year ended December 31, 2022, compared to $27,293 million in 2021[1]. - The company's operating profit rose by 6.5% to $2,093 million in 2022, up from $1,966 million in the previous year[1]. - The profit attributable to the company's owners (before biological fair value adjustments) increased by 34.3% to $1,401 million, compared to $1,043 million in 2021[1]. - Basic earnings per share (before biological fair value adjustments) increased by 48.2% to 10.92 cents, up from 7.37 cents in 2021[1]. - Revenue growth rate for 2022 was 3.1%, down from 6.7% in 2021, a decrease of 3.6 percentage points[14]. - EBITDA margin before biological fair value adjustments increased to 11.2% in 2022 from 9.1% in 2021, an increase of 2.1 percentage points[14]. - Operating profit margin improved slightly to 7.4% in 2022 from 7.2% in 2021, an increase of 0.2 percentage points[14]. - Gross profit for 2022 was $5,177 million, up from $4,996 million in 2021, reflecting a gross margin increase[45]. - Net profit for the year was $1,683 million, representing a 1.9% increase from $1,650 million in the previous year[46]. Sales and Revenue Breakdown - Pork sales volume decreased by 7.9% to 4,019 thousand tons in 2022, down from 4,362 thousand tons in 2021[1]. - The sales volume of meat products increased by 0.7% to 3,344 thousand tons in 2022[1]. - In China, the company's business accounted for 33.9% of total revenue and 49.7% of operating profit in 2022, compared to 38.5% and 47.3% in 2021, respectively[3]. - In the United States and Mexico, the business contributed 56.0% of total revenue and 44.9% of operating profit in 2022, up from 52.0% and 46.7% in 2021[3]. - The company's pork revenue decreased by 1.4% to $11.797 billion, with a significant drop of 17.2% in China attributed to lower average pork prices and adverse currency effects[12]. - The meat products segment generated revenue of $13,808 million, while the pork segment contributed $11,969 million, and other segments accounted for $1,516 million[58]. Operational Challenges and Strategies - The company faced challenges in the US due to labor shortages affecting the sales of biopharmaceutical products, leading to a decrease in operating profit from other businesses by $70 million[13]. - The company plans to continue its strategy of product innovation and channel development to enhance its product mix despite disruptions caused by global pandemic measures[10]. - The company is implementing strategic inventory management and effective cost transfer to mitigate commodity price volatility[38]. - The company is actively managing foreign exchange risks and has a hedging strategy in place for significant risks[39]. - The company anticipates short-term financial performance pressures due to high inflation and macroeconomic conditions affecting consumer confidence[44]. Assets and Liabilities - The company had cash and bank balances of $1.394 billion as of December 31, 2022, down from $1.556 billion in 2021[17]. - The current ratio decreased to 1.6 times in 2022 from 1.7 times in 2021[17]. - Net cash from operating activities was $1.803 billion in 2022, down from $1.958 billion in 2021, primarily due to increased working capital needs[18]. - Total outstanding loans amounted to $3.395 billion as of December 31, 2022, down from $4.049 billion in 2021[23]. - The company maintained a debt-to-equity ratio of 32.3% in 2022, a decrease of 9.1 percentage points from 41.4% in 2021[14]. - The company’s total asset return rate improved to 8.4% in 2022 from 6.8% in 2021, an increase of 1.6 percentage points[14]. - The company reported a total equity of $10,412 million as of December 31, 2022, compared to $9,687 million in 2021[49]. Investments and Acquisitions - Capital expenditures for 2022 amounted to $975 million, up from $933 million in 2021, with significant investments in China, the US, and Europe[26]. - The acquisition of Goodies Meat Production S.R.L. was completed in February 2023, enhancing the company's presence in the European market[29]. - The company sold its stake in Norson, resulting in a pre-tax loss of $12 million, and completed the sale in November 2022[30]. - The sale of Saratoga generated $575 million in proceeds, with a pre-tax gain of $414 million, allowing the company to focus on strategic operations[31]. - The company increased its stake in Granjas Carroll de Mexico from 50% to 66%, integrating its performance into the company's financials[35]. Compliance and Governance - The audit committee confirmed that the consolidated financial information complies with applicable accounting standards and regulations[79]. - The company has maintained compliance with the public float requirements as per the listing rules[86]. - The company will hold its annual general meeting on June 6, 2023, to discuss the proposed final dividend[86]. - The company’s annual report for 2022 will be published on its website and the stock exchange website[87].