JBS posts double-digit revenue growth in Q1

Brazil
Published:  15 May, 2020

The São Paulo headquartered meat processing giant has posted a 27.3% increase in net revenue for the first quarter of 2020 compared with the same quarter in 2019.

JBS’ net revenue totalled R$56.5 billion (US$5.72 billion) in the first quarter of the year, up 27.3% year-on-year. Gross profit amounted to R$7.3 billion (US$1.25 billion), representing a 24.6% increase with gross margin of 12.9%. Adjusted EBITDA was R$3.9 billion (US$671 million), 22.6% higher than in the same quarter of 2019, with an Adjusted EBITDA margin of 6.9%. Adjusted net income was R$803.2 million (US$138.2 million) and reported loss was R$5.9 billion (US$1 billion), impacted by non-cash foreign exchange effect of R$8.2 billion (US$1.4 billion) in the quarter, according to JBS.

JBS Brazil, which includes the JBS Couros tanning Group, recorded net revenue  of R$8.2 billion (US$1.4 billion) in the first quarter, up 20.6% compared with the same quarter in 2019. In the domestic market, net revenue was R$4.9 billion (US$843 million), up 28.6%, attributed to a 7.2% growth in volumes and 19.9% in prices. Beef exports for JBS USA Beef in the U.S. is said to have performed above the American industry’s rates, which grew 10.5% when compared to the volume exported in the same period in 2019. The main import markets for U.S. beef products in the quarter were Japan, South Korea, Mexico and Canada. In Australia, JBS said the challenging cattle availability scenario, coupled with temporary and seasonal shutdown of some plants in the northern region of the country, which occurred due to the rains, impacted production volumes for the quarter. JBS Australia exports grew 4% in the annual comparison, due to higher prices and foreign exchange rate impact.

Gilberto Tomazoni, Global CEO, JBS, said exports from the Brazilian protein sector also had a strong quarter, with beef, chicken and pork sales growing 5.2%, 9.5% and 33.7% respectively, over the same period of the previous year, with the main highlight being China. JBS has the largest number of protein plants in Brazil, certified in Brazil for export to China, with a total of 25 plants.

Fighting the coronavirus pandemic

On May 11, JBS’ Board of Directors unanimously approved a donation of R$700 million (US$120.4 million) to contribute to the efforts being held to combat Covid-19's pandemic effects. In Brazil, the plan foresees the donation of R$400 million (US$68.8 million) in three areas; public health, social assistance and support for science and technology. These resources are said to have directly benefited 162 towns and 17 states. In the U.S., JBS USA temporarily suspended the activities of three of its beef processing plants and one pork processing operating plant, all of which are reported to have already returned to activity. On May 13, JBS USA with Pilgrim’s Pride Corporation announced they are investing more than US$200 million in initiatives to support its employees and communities across the U.S..

Given the characteristics of its operation and geographical manufacturing diversity, JBS said it has the flexibility to redirect part of the products that previously served the food service sector to retail and has been noticing an increase in online sales; both channels are increasing their sales to consumers in confinement.