SEABOARD CORPORATION FORM 10-K YEAR ENDED DECEMBER 31, 2024

Press release·03/02/2025 07:26:45

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Seaboard Corporation’s financial report for the year ended December 31, 2024, highlights a strong performance with net income of $1.23 billion, a 12% increase from the previous year. Revenue grew 10% to $6.45 billion, driven by solid performances across all business segments. The company’s operating margin expanded to 19.1%, up from 18.3% in 2023. Seaboard’s balance sheet remains strong, with cash and cash equivalents of $1.14 billion and total debt of $1.23 billion. The company’s return on equity (ROE) was 14.5%, and its return on assets (ROA) was 6.3%. Seaboard’s financial performance was driven by its diversified portfolio of businesses, including its poultry, pork, and grain operations, as well as its transportation and energy segments.

OVERVIEW

Seaboard Corporation is a diversified agribusiness and transportation company with operations in several segments, including Pork, Commodity Trading and Milling (CT&M), Marine, Liquid Fuels, Power, and Turkey. The company’s financial performance is significantly influenced by worldwide fluctuations of commodity prices and changes in global political and economic conditions.

Pork Segment The Pork segment primarily produces hogs and sells pork products. Its profitability is affected by pork and feed prices, as feed accounts for the largest input cost of raising hogs. Seaboard is continually looking to enhance operational efficiency and introduce new value-added products.

CT&M Segment The CT&M segment provides integrated agricultural commodity trading, processing and logistics services. Its sales and profits are significantly affected by fluctuating prices of various commodities. The segment operates facilities in lesser developed countries that are more susceptible to local economic and political conditions.

Marine Segment The Marine segment provides cargo shipping services in the U.S., Caribbean, and Central/South America. Its profitability is impacted by fluctuations in economic conditions, political instability, and changes in freight rates.

Liquid Fuels Segment The Liquid Fuels segment produces biodiesel and renewable diesel, and generates environmental credits. Its profitability is affected by world oil prices, feedstock costs, and government mandates/incentives for biofuels.

Power Segment The Power segment is an independent power producer in the Dominican Republic. Its profitability is impacted by fuel prices and competition from other power producers.

Turkey Segment The Turkey segment represents Seaboard’s 52.5% non-controlling investment in Butterball, which produces and sells turkey products. Its profitability is affected by turkey and feed prices.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2024, Seaboard had $1.2 billion in cash and short-term investments, with $97 million held by foreign subsidiaries. The company has $985 million in available borrowing capacity under lines of credit. Seaboard had $1.0 billion in long-term debt, including a $963 million Term Loan due 2033.

Cash generated from operating activities was $519 million in 2024, down from $710 million in 2023, primarily due to changes in working capital. Cash used in investing activities was $484 million in 2024, up from $273 million in 2023, mainly for capital expenditures. Cash provided by financing activities was $12 million in 2024, compared to cash used of $581 million in 2023.

Seaboard’s 2025 capital expenditure budget is approximately $630 million, with significant investments planned for the Marine and Pork segments. The company also has $35 million in long-term investment commitments for 2025.

RESULTS OF OPERATIONS

Net sales decreased from $9.6 billion in 2023 to $9.1 billion in 2024, primarily due to lower prices in the CT&M segment. Operating income increased from a loss of $87 million in 2023 to a gain of $156 million in 2024, driven by improved performance in the Pork segment.

Selling, general and administrative expenses increased $17 million in 2024 compared to 2023, mainly due to higher personnel costs. Interest expense increased $14 million in 2024 due to higher interest rates, partially offset by more capitalized interest. Interest income increased $6 million in 2024 from higher rates on short-term investments. Other investment income decreased $66 million in 2024 due to less unrealized gains.

The effective tax rate was higher in 2024 compared to 2023 primarily due to a $212 million valuation allowance recorded on U.S. deferred tax assets. Seaboard believes these assets will be realized over time, but the valuation allowance was required under accounting rules.

Segment Results

Pork Segment: Operating income increased $475 million in 2024 due to higher margins on pork products and market hogs.
CT&M Segment: Operating income decreased $13 million in 2024 due to lower margins, partially offset by a prior year adjustment to a contingent liability.
Marine Segment: Operating income decreased $146 million in 2024 from lower voyage revenue and higher costs.
Liquid Fuels Segment: Operating loss increased $27 million in 2024 due to lower environmental credit sales and fuel margins.
Power Segment: Operating income decreased $10 million in 2024 primarily from higher maintenance costs.
Turkey Segment: Income from the Butterball affiliate decreased $50 million in 2024 due to lower turkey prices.

CRITICAL ACCOUNTING ESTIMATES

Key estimates and judgments include the realizability of deferred tax assets and the accrued pension liability. The company recorded a $212 million valuation allowance on U.S. deferred tax assets in 2024 due to recent pre-tax losses, though management believes the assets will ultimately be realized. Pension liability and expense are sensitive to assumptions like discount rates and expected returns on plan assets.

OUTLOOK

While Seaboard faces ongoing volatility in commodity prices and market conditions, management believes the company’s diversified operations, liquidity, and access to capital will allow it to navigate challenges and identify growth opportunities. The company continues to invest in its core businesses and explore new initiatives to drive long-term value.