JBS revenue misses estimate in first quarter

Brazil
Published:  16 May, 2017

The Brazilian meatpacker reported net income of R$422 million (US$135.7 million) in the first quarter of 2017, missing the initial estimate of R$857 million (US$275.5 million).

JBS’ EBITDA (earnings before interest, tax, depreciation and amortisation) decreased 31% R$2.14 billion (US$687.9 million) as the rotten meat scandal still has its effects on the operations of the country’s beef processors. As reported by ILM, in April, the meatpacking giant shut down six beef processing units in Brazil to adjust stocks following the meat scandal. JBS says, however, the impact will not be long lasting.

Affected by a stronger real, the meatpacker reported a 14.3% drop in net revenue due to weakness at its Seara and JBS Mercosul divisions.  Export sales constituted around 26% the Group’s global sales in the quarter. “Our global production platform, product diversification, continuous investments in innovation and constant focus on cost control and efficiency, allowed us to mitigate the effects from a challenging scenario in South America with good results from our international operations.”, said Wesley Batista, Global CEO, JBS.

According to JBS USA Beef (including Australia and Canada), “a greater cattle availability during this quarter favoured a reduction in cost per head greater than the decrease in beef prices. Domestic demand increased in the period, boosted by more competitive prices and promotional initiatives at large retail chains. Beef exports also grew more than 25% in the period, positively impacting results of the North American operation”.

In Europe, the Group's net revenue was 6.6% higher in the first quarter of 2017, year-on-year, mainly attributed to a 24.9% increase in fresh poultry domestic volumes, “partially offset by lower sales prices in the same segment.”

JBS could delay the initial public offering of its New York international unit, initially planned to be launched in the first half of 2017. Read more here.

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