Brazil's JBS Posts $86m Profit For Third Quarter
JBS SA, the world's largest meatpacker, on Thursday reported a quarterly net profit of $86 million as higher meat prices across its markets bolstered results amid an outbreak of African swine fever in Asia.
The disease, which killed nearly half of China's pig herd, created a global supply imbalance that has benefited Brazilian food producers.
The company, which has a diversified production and export base, said it will continue to generate strong results as incomes are rising in Asia and people move to cities from the countryside.
In remarks after posting results on Thursday, JBS managers told analysts the prospects are bright for operations in the United States, where cattle availability is projected to increase by 2% next year.
While neutral for Brazil, the company said a decision by China to allow US poultry imports will benefit its US-based Pilgrims Pride Corp operation.
In Brazil, where it is headquartered, JBS said it will be necessary to boost chicken production volumes as internal and export demand pickup.
JBS' net revenues stood at R$52.1 billion ($12.4 billion) in the third quarter, a 5.6% rise thanks in part to strong sales in the Brazilian market through its Seara processed foods and beef divisions, according to an earnings statement.
Net sales at Seara increased 7.4% to R$5.4 billion, with a 10% rise in prices helping offset a 2.3% reduction in volumes sold, the company said.
Rise In Pork Exports
JBS also highlighted a 19% rise in pork exports at the Seara division. The unit's chicken and pork sales to China registered a 46% rise in value in dollar terms, JBS said, alluding to demand spurred by China's need to step up food imports.
In the US unit, which includes Australia and Canada, net revenue was $5.6 billion, 3.8% higher from a year ago, reflecting mainly a 3.2% price increase while volumes sold remained virtually flat.
JBS also said operating income came in at R$5.92 billion in the third quarter, above an average estimate of R$5.42 billion.
Managers reiterated plans to make new acquisitions, including "transformational" deals in markets where JBS already operates.
Asked by analysts whether JBS would consider making acquisitions in China, company chief executive Gilberto Tomazoni said the priority is investing to secure a reliable distribution platform there.
Still, he said, the company would consider any "undeniable" acquisition opportunities in the Asian country.