Gold Kist reports loss, cuts production

Gold Kist has posted a net loss of $17.7 million on $2.1 billion in revenue for the 2006 financial year, compared with net income of $112.2 million on $2.3 billion in revenue in fiscal 2005.

Loss per share was 35 cents, compared with earnings of $2.22 a share in 2005.

"Conditions in the poultry industry changed significantly in fiscal 2006 following the two best years in the company's history," said John Bekkers, president and CEO.

"In fiscal 2006, an oversupply of broilers and competing meats led to a decline in broiler prices [of 8.3 percent]. We believe concern about avian influenza in export markets was the primary cause for reduced consumption in those markets, which further contributed to greater domestic supply and lower sales prices for the year."

Gold Kist announced an extra 1.75 percent reduction in broiler placements, resulting in a total reduction of 5 percent, or 700,000 chickens per week compared to 2005.

Pilgrim's Pride has also reported a net loss of $34.2 million on $5.2 billion in revenue for fiscal 2006, compared with net income of $265 million on $5.7 billion in revenue in fiscal 2005.

In October, Gold Kist rejected Pilgrim's Pride's takeover bid and filed a lawsuit to stop the company from proceeding with its "unlawful solicitation" of Gold Kist stockholders to add its own officers to Gold Kist's board. Gold Kist maintains Pilgrim's Pride's offer to buy out Gold Kist's stock at $20 a share is "inadequate" and "not in the best interests of stockholders."

Tyson Foods, the number one meat producer in the US, also reported a fourth-quarter loss recently.

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Editor WorldPoultry