U.S. pork producer and processor Smithfield Foods’ operating profit in Romania quadrupled in the 2013 fiscal year ended in April to $41.4 million, thanks to higher sales and farm subsidies.
In the 2012 fiscal year, Smithfield Foods registered operating profit of $7.9 million on the local market.
Sales rose 3% in the analyzed interval from $245.8 million to $252.3 million, the company said in its financial report.
“Sales and operating profit in our Romanian operations improved on significantly higher average unit selling prices and sales volumes, which benefitted from the approval to export pork products to European Union member countries beginning in the fourth quarter of fiscal 2012,” the report reads.
Operating profit also improved as a result of a $5.4 million reduction in foreign exchange transaction losses and a $3.9 million increase in farm subsidies received by the company.
Smithfield Foods’ total sales were steady in the 2013 fiscal year, at $13.22 billion, while its net profit halved to $184 million.
The U.S. company will be taken over by meat producer Shuanghui International in a transaction worth $7.1 billion, the two companies said at the end of May. They expect to complete the deal in the second half of the year.
Smithfield is the world’s largest pork producer and processor. It registered revenues of $13.1 billion in the 2012 fiscal year and net profit of $361 billion.
The group started operations in Romania in 2004, when it bought the local companies Agrotorvis and Comtim Grup. Later, Smithfield bought 50% of food products wholesaler Agroalim Distribution Bucharest, as well as 50% in the Frigorifer storage facility, in eastern Romania.