Fitch rating outlook for JBS 'stable'
Oct. 13, 2016
by Erica Shaffer
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Fitch expects the meat processor to reduce its debt in the next 18 months.
NEW YORK – Fitch Ratings affirmed JBS SA’s outlook rating as stable. The agency gave the meat processor’s Issuer Default ratings (IDRs) and senior unsecured notes a ‘BB+,’ while JBS’s National Scale rating was at ‘AA+(bra)’.
Key factors driving the ratings are JBS’ strong business profile as the world’s largest meatpacker and its diverse portfolio of beef, chicken, pork and prepared foods products. JBS’ geographic diversity also mitigates risks related to animal diseases and trade restrictions, Fitch noted.
“Fitch expects JBS beef operations in the US to gradually improve its profitably thanks to increased cattle availability and demand for export,” Fitch said in its ratings report. “JBS’ pork business remains solid, and low grain prices in the US should continue to support profitability in the company’s US chicken division.”
Fitch added that the ratings agency did not factor in large debt-financed acquisition over the next 18 months. As part of its global reorganization strategy, JBS management plans to list the group on the New York Stock Exchange. The company also is focused on quickly paying down its debt spending about $15.5 billion reals in acquisitions in 2015, according to Fitch.