JBS net revenue up 34% in third quarter

Published:  13 November, 2020

The Brazilian meatpacker posted a consolidated net revenue of R$70.1 billion (US$12.84 billion) for the third quarter of 2020, up 34.3% year-on-year, with all business units posting revenue growth.

JBS said that for the third quarter, approximately 74% of the Group’s global sales came from markets in which it operates and 26% came from exports. EBITDA was R$8 billion (US$1.46 billion) with a margin of 11.4% and free cash flow totalled R$5.2 billion (US$952.75 million). Net income in the period amounted to R$3.1 billion (US$568 million), reducing the Group’s leverage to 1.60x, the lowest in JBS´ history.

For JBS Brazil, which includes JBS Couros, net revenue totaled R$11.4 billion, (US$2 billion), which corresponds to a 35.3% increase over the third quarter of 2019 as a result of a 49.8% increase in the average sales price that is said to have more than offset the 9.6% reduction in volume sold. “Given the low availability of cattle, the level of beef production was affected during the quarter, which impacted the cost of raw material, with the average arroba price increasing over 49.7%”, said JBS, adding that “this impact was partially compensated by the increase of beef prices in the domestic and export markets”. In the domestic market, net revenue totalled R$6.5 billion (US$1.2 billion), which corresponds to a 50% increase in the annual comparison, mainly attributed to the 59% increase in the average sales price, despite the 5.7% reduction in volumes sold. In the export market, which represented 43.5% of the business unit's sales in the quarter, net revenue was R$5 billion (US$916 million), up 20.1% year-on-year; attributed to the 48.3% increase in average sales price which is reported to have more than compensated the 19% reduction in volume sold.

JBS USA Beef, which includes the Australian and Canadian units, posted a net revenue of R$28.8 billion (US$5.27 billion), a 28.7% increase of 28.7% over the same quarter in 2019, with an EBITDA of R$2.8 billion (US$513 million), 16% higher year-on-year, and an EBITDA margin of 9.6%. In the U.S. and Canada, JBS said that cattle supply remained ample, however, an increase in the number of animals processed drove finished cattle prices to a higher level when compared to the same period of 2019. In Australia, the lack of cattle availability is said to continue to impact beef production. According to information from Meat & Livestock Australia (MLA), the years 2019 and 2020 have observed the lowest cattle herd in the country in the last 20 years, totalling 25 million head of cattle. JBS said that the lack of finished cattle in the main producing regions caused a temporary halt and reduction of shifts in processing facilities during the quarter, affecting the business unit performance