JBS S.A. Q2 profit falls 97%, but sales increase
August 16, 2010
by Meat&Poultry Staff
SÃO PAULO – JBS S.A. announced it posted a 97% slump in second-quarter profit in the aftermath of two mergers, which was partly due to high exchange rate volatility even as revenues rose, according to Reuters. Second-quarter net profit totaled 3.7 million reais ($US2.09 million) as opposed to 125.9 million reais (US$71.1 million) in the second quarter in 2009, although the results are not readily comparable with last year's due to recent mergers.
However, JBS’s net revenues for the quarter increased 52.5% from the same period in 2009 to 14.1 billion reais (US$8 billion).
Analysts expected 180 million reais in net profits, they said in a Reuters poll.
Results from Pilgrim's Pride are now incorporated in JBS S.A.’s figures –in September 2009, JBS bought a 64% share of Pilgrim’s last year and acquired local rival Bertin.
Joesley Medonca Batista, chief executive officer, explained in a company statement demand for working capital, coupled with the impact from exchange rate volatility during the quarter, were the primary reasons “for the retreat in profit." On the other hand, the sales increase reflected the rise in sales prices, favorable market conditions and a 22.2% increase in the client base, according to JBS S.A.
Mr. Batista expects volumes and prices will continue to be strong in the second half this year, particularly from the United States, as international trade normalizes, the news release stated.