SÃO PAULO, Brazil – JBS SA, the world’s largest meat packer, showed signs of recovery after posting a fourth quarter 2016 profit of 693.9 million reais ($219,144,777.91), reversing the loss the company reported in the same quarter of 2015.
Net revenues for the quarter were 41.6 billion reais ($13,137,948,928.00), down 11 percent compared with the year-ago quarter due to the appreciation of the Brazilian real and reductions in net revenue at Pilgrim’s Pride Corp. (2.7 percent), JBS Mercosul (3.5 percent) and Seara (12.8 percent), the company said.
Wesley Batista, global CEO of JBS SA, said in a statement that the company focused on consolidating its recent acquisitions and focused on raising brand recognition in each business segment and global regions.
“We continued to diversify our production platform, which has proven, once again, an important competitive advantage,” Batista said. “The significant scope and scale of our global operations provides JBS access to raw materials in different regions, while also providing access to every consumer market in the world. Importantly, this strategy has enabled the company to mitigate volatilities, whether associated with commodities cycles, challenging macroeconomic scenarios in certain countries or regional commercial or sanitary barriers. Thus, we have been able to leverage the considerable advantages of our global scale, creating a resilient business model that consistently delivers solid results.”
On a segment basis, the company’s Seara unit reported a 12.8 percent decline in net sales to 4,683.5 million reais. JBS attributed the result to lower volumes and sales prices in export markets, which were partially offset by a positive performance in the prepared foods and fresh poultry divisions in the domestic market.
“Throughout the year, despite the challenging scenario of raw material costs, Seara remained focused on operational improvements and managed to evolve in several fundamental aspects intrinsic to its business, including: better indexes in its service level and expansion of its customer base, reaching 149,000 points of sale at the end of [the fourth quarter], 6,000 more clients than in [third quarter], showing that the brand continues to gain the preference of the consumer,” the company said.
Declining export volumes led JBS Mercosul to post net revenue of 7,227.6 million reais, down 3.5 percent compared with the year-ago period.
JBS USA Beef, which includes Australia and Canada, reported net revenue totaled $5,333.0 million, an increase of 1.6 percent compared with the fourth quarter of 2015 due to lower prices for beef, which was offset by an increase in volumes in both domestic and export markets.
The company’s JBS USA Pork business saw a 26.2 percent increase in net revenue to $1,373.0 million due to the acquisition of Cargill’s pork business in November 2015. JBS said its US pork unit increased the number of hogs processed by 22.4 percent in the period. Pork exports surged 76.3 percent, with China, Japan and South Korea the main destinations for JBS pork, the company said.
Pilgrim’s Pride, a poultry unit of JBS SA, recorded revenue of $1,908.3 million, down 2.7 percent. Earnings before interest, tax and debt allocation climbed 14.8 percent. “The solid result during the quarter is attributed to the positive performance of fresh domestic segments, with case-ready and small birds being the main highlights, in addition to better exports,” JBS said. “Operations in Mexico also contributed positively to the results, despite being impacted by the depreciation of the Mexican Peso in relation to the US dollar.”
JBS Europe, which includes Moy Park in Northern Ireland, posted net revenue of £372.3 million ($306,293,711.86), a decrease of 1.5 percent compared with the year-ago quarter.
“Like-for-like sales however, after adjusting for discontinued business and difference in year-end cut of dates, shows an increase of 7.4 percent reflecting the ongoing growth of the business,” JBS said.
In addition to the company’s financial filing, the JBS SA announced a definitive share purchase agreement with Danish Crown to acquire Plumrose USA in a transaction valued at $230 million. Plumrose reported annual net revenue of about $500 million.
The deal includes prepared foods facilities in Indiana; Mississippi, Vermont and two in Iowa; in addition to two distribution centers in Indiana and Mississippi. The acquisition is subject to regulatory approvals.
(1 Brazilian Real = 0.32 US Dollar)
(0.82 British Pound = 1 US Dollar)
