JBS S.A. suffers loss, but sales rise in Q3
Nov. 16, 2011
SÃO PAULO, BRAZIL – JBS S.A. sustained a loss of 67.5 million reais ($38.3 million) in the third quarter ended Sept. 30, bogged down by a loss of $162.5 million in the company’s chicken operations as well as a net negative foreign exchange result of 170.6 million reais ($96.8 million). Excluding these items, JBS’ profit would have been 372.1 million reais ($211.1 million).
Third-quarter net revenue totaled 15,567.8 million reais ($8,832.8 million), up nearly 11% from the same period a year ago. Highlights during the quarter included the JBS USA Beef and Pork business units, which experienced growth of 25% and 12%, respectively, when compared with the same period last year.
During the third quarter, JBS said 75% of revenues were generated in the domestic market and exports represented approximately 25%.
EBITDA for the third quarter was 786.8 million reais ($446.4 million), down 24% from a year ago, due to the underperformance by Pilgrim’s Pride (JBS USA Chicken). When compared with the second quarter of fiscal 2011, EBITDA increased 34%, reflecting the substantial improvement of the JBS USA Beef business unit, in addition to the continuous capture of synergies and operational improvements.
JBS USA Beef’s (including Australia) net revenue for the third quarter totaled $4,210.6 million, up 25%. The results reflected an increase in average sales prices in the domestic and exports markets combined with better utilization of production capacity. EBITDA was $184.1 million in the period, up 78% from last year. The EBITDA margin was 4.4%, reflecting the stabilized raw material price and good export performance.
JBS USA Pork net revenue was $867.1 million, up 12% from the third quarter of fiscal 2010, reflecting the increase in export volumes and average sales prices. EBITDA reached $75.9 million in the quarter, down 16.4% from last year. EBITDA margin was 8.8% in the third quarter.
JBS USA Chicken (Pilgrim’s Pride, which is controlled by JBS USA) net revenue for the third quarter was $1,891.2 million, up 10% from last year, reflecting an increase in volumes sold. Adjusted EBITDA was a negative $31.4 million, which compared with a loss of $47.6 million in the second quarter of fiscal 2011. The negative result reflected high input costs, including grain prices and an oversupply, which prevented the transfer of costs to selling prices.
The company already has captured $295 million in operational improvements, from an estimated total of $400 million, which minimized the impact of the increase in production costs.
Net revenue of JBS Mercosul was 3,906.7 million reais ($2,216.6 million) during the third quarter, an increase of 11.9% from the third quarter of fiscal 2010, as a result of an increase in sales prices. EBITDA was 453.8 million reais ($257.5 million) in the quarter, up 21% from a year ago.