JBS announces record 3Q, six new plants opening

by Meat&Poultry Staff
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SÃO PAULO, Brazil – During a conference call to provide details of its 2012 third quarter performance, JBS S.A. officials announced plans to open six new beef-slaughtering plants in Brazil in 2013, increasing capacity there by 1.2 million head, or 15 percent, by July of next year.

The company reported net revenue of R$19.4 billion ($9.4 billion) for its fiscal 2012 3Q, a 24.4 percent increase over the R$15.6 billion reported in the same period last year. JBS posted record profit for the quarter of R$367 million ($178 million), resulting from improved poultry operations in the US and positive results in its beef operations in Brazil. Gross income increased 46.2 percent to R$2.5 billion ($1.2 billion) over the previous year’s same quarter of R$1.7 billion (822 million).

JBS USA’s Pilgrim’s Pride Corporation reported net revenue of $2.1 billion and adjusted EBITDA of $105.6 million in the quarter, which compared positively to the negative results in the same quarter of 2011. EBITDA for the business unit was 5.1 percent.

JBS USA Beef reported revenue of $4.3 billion in the quarter, a 1.6 percent increase over the previous year’s 3Q. For the quarter, EBITDA was $175.1 million.

The company recently announced plans to acquire Agroveneto S.A., a poultry production company in southern Brazil. It also agreed to manage the assets of Canada’s troubled XL Foods, with an option to purchase the company’s two plants as well as a feedlot and a farm in addition to XL’s two plants in the US.

Plans for the opening of the six new plants in Brazil commence Nov. 19, when operations will start up at Rolim de Moura (in Rondonia). On Dec. 3, operations will begin at Nova Andradina (Mato Grosso do Sul), followed by Pontes e Lacerda and Vila Rica (Mato Grosso) on Jan. 7. Senador Canedo (Goias) is slated to start up Feb. 4 and Castelo dos Sonhos (Para) on April 8. Jerry O’Callaghan head of investor relations said by the end of 2013 the new plants would be able to produce 2 million head annually.

JBS Chief Executive, Wesley Batista said the future of beef production in Brazil is very positive compared to the US.

"The cost of raising an animal in the United States is twice the cost of raising an animal in Brazil. So, they are reducing the size of their herd," Batista said.

Meanwhile, net revenue for the JBS pork business for the quarter was $846.1 million, 2.4 percent lower than the previous year. Revenue was stable compared to the company’s 2Q12, as lower selling prices tempered higher slaughter numbers during the quarter.

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