China's WH Group has informed shareholders and potential investors, that based on preliminary review of unaudited consolidated management accounts, the group is expecting a 56% drop in its first quarter 2023 profit outlook, from the US $395 million for the same period in 2022. In a filing with the Stock Exchange of Hong Kong, the owner of Smithfield Foods says the decrease, before biological fair value adjustments, is mainly attributable to the challenging market conditions in the U.S. pork segment.

"Hog raising costs remain elevated while pork prices have been adversely impacted by softer consumer demand. The industry gross cut-out margin, or the spread between meat values (carcass cut-out published by the USDA) and hog costs (lean hog index published by Chicago Mercantile Exchange, Inc.), also declined significantly year-over-year during the three months."

The information contained in the announcement is only based on the preliminary assessment by the board, with reference to the unaudited consolidated management accounts of the group for the three months ending March 31, which have not been finalized and is subject to adjustments. Shareholders and potential investors are advised to read the official announcement regarding the unaudited consolidated quarterly results of the group for the first quarter, which is expected to be published in late April.

For fiscal year 2022, ending Dec. 31, profit attributable to owners of the company, before biological fair value adjustments, was US $1.4 billion, representing an increase of 34.3%.