Smithfield estimates increased earnings
Smithfield Foods Inc. has forecasted a $12 million to $13 million charge against fiscal second quarter 2008 earnings related to swine fever outbreaks at its Romanian hog operations. It has more than doubled its earlier estimate.
In August Smithfield, Va.-based estimated the earnings hit at $4 million to $5 million. The earlier estimate was based on outbreaks at two Smithfield facilities. However, on August 23, the disease was discovered on a third farm.
The company said, “Given the third reported outbreak and escalating disposal costs, the write-down and disposal costs are expected to exceed the previously reported level. Because of the fluidity of the situation in Romania, the actual charge may be more or less than the latest estimate.”
Smithfield added that it may be entitled to government reimbursement for certain euthanasia and animal disposal costs, but would not receive those funds by the second quarter.
As a result of the outbreaks, the company is expecting limited or minimal interruptions to farm production flows in Romania over the next 6 to 12 months.
Smithfield has invested $1.1 billion in western Romania, where it is the largest pork producer.
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