Smithfield Foods ends monetization component of credit facility

Smithfield Foods, Inc. (NASDAQ:SFD), a $9.35 billion market cap company, announced that on Tuesday it entered into an omnibus amendment to its existing credit and receivables sale agreements. According to a statement in a press release, the company and certain subsidiaries amended and restated the Fifth Amended and Restated Credit and Security Agreement and the Fifth Amended and Restated Receivables Sale Agreement, both originally dated December 22, 2022.

As a result of the amendment, Smithfield Foods terminated the monetization component of its receivables facility. The company stated that this component was initially established to provide additional liquidity and working capital flexibility. Smithfield Foods cited its current liquidity position and internal capital resources as reasons for determining that the monetization component was no longer cost-effective or necessary. This decision aligns with the company’s strong financial health, reflected in its healthy current ratio of 3.11 and moderate debt-to-equity ratio of 0.38, according to InvestingPro data.

The amendment includes technical and conforming changes to reflect the removal of the monetization component and memorializes the securitization component of the facility, which remains in place. The company reported that there were no early termination penalties or other material exit costs related to ending the monetization component.

Smithfield Foods is incorporated in Virginia and its common stock is listed on the Nasdaq Global Select Market under the symbol SFD. The information in this article is based on a statement from a press release and a filing with the Securities and Exchange Commission.

In other recent news, Smithfield Foods reported strong financial results for the first quarter of its fiscal year 2025. The company achieved an adjusted operating profit of $326 million, representing an 86% increase compared to the same period last year. Consolidated sales also rose by 9.5%, reaching $3.8 billion. Adjusted net income climbed to $227 million, up from $123 million in the previous year, and adjusted earnings per share increased to $0.58 from $0.32. Additionally, Citi reiterated its buy rating and maintained a $28.00 price target for Smithfield Foods, following meetings with the company’s management team. The analysts noted a generally positive outlook for the company’s growth prospects despite a weaker consumer environment. At the recent annual meeting, Smithfield Foods’ shareholders approved several key proposals, including the election of directors and ratification of an accounting firm. Directors C. Shane Smith, Xiaoming Zhou, and John A. Quelch were elected to serve until the 2028 Annual Meeting.

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