Tyson Foods net profit, sales up in 2020

0

Tyson FoodsNet income nearly doubled in the fourth quarter of fiscal 2020 compared to the fourth quarter of 2019, while also increasing moderately for the full year.

The diversified protein company has released its annual financial results, for the year ending October 3, November 14.

Tyson’s net income for the fourth quarter was $ 695 million, up from net income of $ 372 million in the fourth quarter of 2019. For the full year, Tyson’s net income was amounted to $ 2.15 billion, up from $ 2.03 billion in 2019.

“Our business has performed well and delivered strong fourth quarter and full year results,” said Dean Banks, President and CEO of Tyson Foods. “Our team members, agricultural partners and customers have shown resilience. This has allowed us to maintain and accelerate our efforts to provide consumers around the world with a safe and accessible food supply. “

The company also saw sales increase for the year as a whole, with the 2020 figure reaching $ 43.19 billion. Tyson’s 2019 sales were $ 42.01 billion. For the quarter, sales increased to $ 11.46 billion from $ 2.03 billion. The fourth quarter of 2020, however, contained one week longer than the fourth quarter of 2019.

Impact of COVID-19 in 2020

Tyson Foods incurred additional direct expenses associated with the impact of COVID-19 totaling approximately $ 200 million and $ 540 million for the fourth quarter and twelve months of fiscal 2020, respectively.

These direct incremental expenses primarily included team member costs associated with worker health and availability and production facility downtime, including direct costs for personal protective equipment, disinfection of production facilities, COVID-19 testing, donations, product downgrades and returned product, partially offset by the CARES Credits Act. Other indirect costs associated with COVID-19 are not reflected in this amount, including costs associated with raw materials, distribution and transportation, underutilization and reconfiguration of factories, bonuses paid to breeders cattle and tariff discounts.

Performance by segment

Beef – Sales volume increased by 11.8%, or 3.8% after eliminating the impact of an extra week, for the fourth quarter of fiscal 2020 mainly due to a fire that caused the temporary closure of a production facility during the fourth quarter of fiscal 2019.

Sales volume decreased 4.5%, or decreased 6.5% after removing the impact of an extra week, for fiscal 2020 due to lower production throughput associated with the impact of COVID-19 during parts of fiscal 2020 and a reduction in harvesting capacity of live cattle as a result of a fire that caused the temporary closure of a production plant for most of the first quarter of fiscal 2020.

The average selling price decreased in the fourth quarter of fiscal 2020 due to increased availability of live cattle supply and lower cost of livestock. The average selling price increased in fiscal 2020 as demand for beef remained strong amid supply disruptions linked to the impact of COVID-19.

Operating income increased primarily due to market conditions, including COVID-19-related disruptions, which increased the gap between pre-existing contractual agreements and the cost of steers, and the impact of a additional week in fiscal 2020, partially offset by price reductions offered to customers, as well as production inefficiencies and direct additional expenses related to COVID-19. Additionally, the fourth quarter of fiscal 2019 was impacted by $ 31 million in net incremental costs related to the production facility fire.

Pork – Sales volume increased 15.2%, or 6.9% after eliminating the impact of an extra week, for the fourth quarter of fiscal 2020 due to strong product demand pigs and the increased domestic availability of live pigs. Sales volume increased 1.8%, or decreased slightly after eliminating the impact of an extra week, for fiscal 2020, due to strong demand for Tyson pork products and availability increase in live pigs domestically, offset by a lower production throughput associated with COVID-19 during portions of fiscal 2020.

The average selling price in the fourth quarter of fiscal 2020 has decreased due to lower livestock costs. The average selling price in FY2020 increased as demand for pork remained strong amid supply disruptions linked to the impact of COVID-19, partially offset by lower costs of livestock.

Operating profit increased primarily due to market conditions, including disruption related to COVID-19, which increased the gap between pre-existing contractual agreements and the cost of live pigs, and the impact of an additional week in fiscal 2020, partially offset by production inefficiencies and direct additional expenses related to COVID-19.

Chicken – Sales volume increased by 1.9%, or decreased by 5.4% after eliminating the impact of an extra week, for the fourth quarter of fiscal 2020, and slightly increased or decreased by 1 , 7% after eliminating the impact of an additional week, for fiscal 2020 mainly due to a decrease in production throughput associated with the impact of COVID-19 during parts of fiscal 2020 and a decrease demand for food services, partially offset by increased retail demand.

The average selling price decreased mainly due to lower chicken prices due to market conditions. Operating profit declined primarily due to market conditions, an unfavorable product mix, as well as production inefficiencies and direct additional expenses related to COVID-19. Operating income was also impacted by approximately $ 45 million in net derivative gains in the fourth quarter of fiscal 2020 and approximately $ 70 million in net losses in the fourth quarter of 2019, in addition to approximately $ 50 million. lower food ingredient costs in the fourth quarter of fiscal 2020 compared to the fourth quarter of fiscal 2019. For fiscal 2020, the net results of derivatives and feed ingredient costs were relatively stable compared to fiscal 2019 and fiscal 2019, respectively.

Prepared Foods – Sales volume increased 1.6%, or decreased 5.6% after removing the impact of an extra week, for the fourth quarter of fiscal 2020, and decreased 1.9% , or decreased 3.7% after removing the impact of an extra week, for fiscal 2020 as volume growth in the retail channel was offset by a reduction in the retail channel. catering related to reduced demand and lower production throughput due to the impact of COVID-19 during parts of fiscal 2020.

The average selling price increased in Q4 and FY2020 due to a favorable product mix associated with increased retail demand, and for FY2020 the pass-through of increased sales. raw material costs.

Operating profit increased in the fourth quarter of fiscal 2020 due to a favorable product mix associated with strong demand for retail products and the impact of an extra week, partially offset by the impacts the decline in restaurant sales. Operating profit decreased in fiscal 2020 primarily due to increased operating costs, including a $ 105 million increase in net raw material costs and derivative losses, as well as production inefficiencies and direct additional expenses related to COVID-19, partially offset by reduced promotional expenses. Operating income was also impacted by $ 28 million and $ 18 million in restructuring costs incurred in fiscal 2020 and 2019, respectively. Additionally, operating income for the fourth quarter of fiscal 2019 was further impacted by an impairment charge of $ 41 million resulting from a planned divestiture of a business.


Source link

Share.

About Author

Leave A Reply