JBS reports 74% drop in Q3 profit
Nov. 15, 2016
by Joel Crews
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SÃO PAULO, Brazil – Expressing relief that its 2016 fiscal third quarter is over, the top executive with JBS SA said the company looks forward with optimism after it reported a 74 percent decrease in profit to R$887.1 million ($258.4 million) for the quarter, with net revenue of R$41.2 billion for the three months ended Sept. 30 compared to R$3.44 billion during the same period last year, a slip of 4 percent.
Citing the impact of the stronger Brazilian Real on its export business profitability, Wesley Batista, Global CEO, said, “We believe that the most challenging period for our platform in South America is over and we should see the recovery of the profitability in the next quarters.”
Decreased demand from customers in countries including Argentina, Venezuela and Paraguay were largely responsible for lower sales. For the quarter, EBITDA was R$3.1 billion, a drop of 18 percent from the same period last year’s R$3.83 billion.
As for its US-based business units, JBS USA Beef net revenue slipped 6.8 percent to $5.36 billion during the third quarter compared with $5.75 billion at the same time last year due in part to lower prices in the US marketplace. JBS Pork in the US saw net revenue increase 72.2 percent, from $785.4 million to $1.35 billion during the quarter, nearly one year after the company acquired Cargill Pork LLC for $1.45 billion.
JBS USA’s poultry business, Pilgrim’s Pride Corp. reported a loss in revenue of 3.8 percent, from $2.11 billion in Q3 2015 to, $2.03 billion in the same period of 2016.
JBS SA’s Seara poultry business unit saw net revenue drop to R$4.58 billion during the quarter compared with R$5.01 billion during the same quarter last year. In the beef segment, JBS Mercosul’s net revenue also slipped 5 percent, from R$7.15 billion to R$6.79 billion. Meanwhile, Moy Park, the recently acquired poultry processor based in the United Kingdom, reported an uptick in revenue of 0.6 percent, to £352.8 million ($440.7 million)
“Our global production platform and the diversification of our product portfolio allow us to mitigate challenging situations, while permitting us to pursue regional and/or segment opportunities,” said Batista.
“In our international operations, we are optimistic and confident with the performance of all of our business units in the coming quarters,” he said, “especially in our beef business in the US.”