Smithfield Foods posts quarterly loss
Published 4:45 pm Friday, August 21, 2020
As a result of spending $350 million to protect its employees and the food supply during the coronavirus pandemic, Smithfield Foods posted a $72 million loss for the second quarter of 2020, the company said.
Smithfield incurred both direct and indirect incremental expenses related to COVID-19 during the three months ending June 28. The costs included $195 million in people-related expenses, $125 million in facility-related costs and $30 million in community-related costs, according to an Aug. 11 announcement.
People-related costs included “fully compensating over 22,000 employees to stay home at various points during the pandemic,” free on-site and on-demand COVID-19 testing for all employees provided by private health care professionals hired by the company, and expanding employee healthcare benefits.
Facility-related costs included installing mass thermal scanning systems and physical barriers, along with money spent on personal protective equipment. Smithfield also says it adopted “stringent and detailed processes, protocols and protective measures” that follow or exceed federal industry guidelines.
The community costs were a result of donating 40 million servings of protein to food banks nationwide. About 2,000 employees work at the company’s Smithfield-area facilities. Nationally, the company employs about 40,000.
“While a facility-by-facility breakdown of our COVID-19 spend is not available, we can share that we have deployed tens of millions to protect our team members in Smithfield specifically,” said Keira Lombardo, executive vice president of corporate affairs and compliance, said in a statement provided to The Smithfield Times.
As a result of the pandemic, Smithfield said its adjusted operating results for the second quarter of this year were 140% below the same time a year ago. “Even when factoring in a benefit from risk management activities entered into before the pandemic, second-quarter results were positive, but remained 54 percent, or $119 million, below a year ago,” the company said.
In the earnings announcement, Kenneth M. Sullivan, the company’s president and chief executive officer, said, “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.”
Asked if the pandemic has affected the company’s hiring outlook locally or nationally, Lombardo said, “we continue to hire to fill vacant positions where we have operations. We are keenly focused on retaining talent and attracting employees through avenues such as advertising, social media, referrals and other recruitment activities that are acceptable given COVID-19 restrictions.”
Sullivan expressed optimism about the business outlook for the rest of the year. “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.”