Sao Paulo | Reuters — JBS, the world’s largest meat company, on Wednesday posted record quarterly net revenues of nearly $21 billion (C$28.97 billion) even as it navigates a challenging U.S. cattle cycle and deals with global geopolitical tensions, according to an earnings release.
The company, which reported results for the first time after listing shares on the New York Stock Exchange in June, recorded net profit of $528.1 million (C$728.5 million) in the second quarter, representing a 60.6 per cent annual rise.
Why it matters: JBS, the world’s largest meat company, has a large presence in the Canadian beef industry.
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The results were mainly driven by the good performance of subsidiary Pilgrims Pride, which posted earnings before interest, tax, depreciation and amortization (EBITDA) of $817.7 million.
JBS also highlighted the resilience of its Seara processed food business amid an outbreak of bird flu in Brazil.
CEO Gilberto Tomazoni cited weakness of JBS’s U.S. beef business, which represents around a third of the company’s net sales and posted $233 million negative EBITDA in the last quarter.
But while that unit struggled, the company’s Brazilian and Australian beef operations stayed healthy.
“We live a challenging moment, but given the context, we are pleased with what we are delivering in terms of margins,” Tomazoni said in an interview, referring to JBS’s overall margin of 8.4 per cent for the quarter.
A 50 per cent U.S. tariff on Brazilian products, including beef, is also weighing on Brazilian meatpackers in general.
Tomazoni said JBS accounts for around 15 per cent share of Brazilian beef exports to the U.S., where it also operates many factories. Brazil exported 180,000 tonnes of fresh beef to the U.S. in the first half.
Because of the tariff, Tomazoni said certain JBS factories in Brazil briefly stopped production. They later resumed to redirect some geef products to other markets.
“The most important thing is that our platform was built taking into account these things happen,” he said referring to obstacles like trade and sanitary barriers.
Brazil’s bird flu outbreak partially interrupted exports from companies in Brazil, the world’s largest chicken exporter.
China and the European Union have not yet resumed importing poultry from Brazil, which the CEO regrets because the outbreak has been controlled.
“The expectation is that this will be resolved… I hope in the coming weeks.”
