Smithfield Foods loses $72 million in second quarter due to COVID-19 expenses
Smithfield Foods, Inc. says it spent $350 million to protect its team members and the American food supply during the COVID-19 pandemic, causing adjusted operating results to swing to a loss in the second quarter of 2020.
The first half of 2020 was “a tale of two tapes”: prepandemic and pandemic, said Smithfield in a news release. Prior to the onset of COVID-19 in the U.S., Smithfield said it delivered record results in the first quarter of 2020, which were 190% higher than 2019. However, the impact of the pandemic weighed heavily on the company’s second quarter, pushing adjusted operating results 140% below a year ago to a $72 million loss.
Smithfield said it incurred both direct and indirect incremental expenses related to COVID-19 totaling $350 million during the second quarter. This included $195 million in people-related costs, $125 million in facility-related costs, and $30 million in community-related costs.
“Going forward, we expect performance to rebound in the fall, as our COVID-19 related costs, some of which were one-time or short-term in nature, are declining,” said Kenneth M. Sullivan, president and chief executive officer, for Smithfield.
Commenting on the company’s ongoing approach to COVID-19, he concluded, “Throughout the pandemic, we have had two priorities, and two priorities only. First, keep our people healthy and safe. And, second, keep our nation fed. These remain our sole priorities. We thank our Smithfield Family for working tirelessly to keep food on America’s tables.”