Smithfield Foods has insisted it has seen its “second best year” of profits, despite booking a 31% fall in net income.

Net profit fell 30.7% to US$361.3m in the 12 months to the end of April, down from $521m the previous year. The US meat group emphasised it was up against a tough comparison, with fiscal 2011 being the most profitable year in the group’s history.

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Smithfield’s operating profit fell 34% to $722.6m amid higher costs and a loss on equity investments.

The company’s sales, meanwhile, reached a “record” of $13.1bn, up 7% year-on-year.

CEO Larry Pope said the firm’s focus on expanding its value-added packaged foods business was beginning to pay dividends.

“Our packaged meats business delivered another outstanding year and, in spite of higher raw material costs, grew operating profit by more than $50n, or $.02 per pound. Our strategy for growth is beginning to pay off, as we continue to coordinate our sales and marketing team approach, focus on our twelve core brands, invest in consumer-focused advertising, and build a strong innovation pipeline to grow share and distribution,” Pope remarked.

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Pope said during the year Smithfield was able to increase market share in bacon, dinner sausage, hot dogs and marinated pork. The group also increased distribution in bacon, BBQ, deli meats, dry sausage, ham steaks, marinated pork, and portable lunches.

However, the group’s fresh pork business was hit by a 15% increase in hog prices. However, profits at the group’s hog business were also down as price increases failed to offset an 18% jump in raising costs.

Click here for the full release and click here for Larry Pope’s assertion that Wall Street does not value Smithfield highly enough.