Brazil’s JBS SA , the world’s largest meat-packer, on Tuesday reported a net profit of 1.64 billion reais ($319.74 million) for the first quarter, which beat analysts’ expectations by a wide margin, according to an earnings statement.
After a strong quarter for its U.S. pork business and its beef and processed foods divisions in Brazil, JBS said earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, was 6.4 billion reais in the period.
Analysts had predicted JBS’s net profit at 869.1 million reais, and EBITDA at 5.2 billion reais.
Overall, JBS reported a 2.8% rise in net revenue globally to 89.1 billion reais in the quarter, partly reflecting more beef demand in Brazil, its home market.
JBS, which derives most of its sales from the U.S., said the first quarter of 2024 was also marked by growth in the average price for wholesale pork cuts in that country, a reflection of stronger demand for that protein type resulting from the shift in consumption from beef to pork.
Pork sales internationally also helped JBS’s results and that of competitors, JBS said, citing USDA data indicating an 11% increase in pork exports, especially to Mexico, South Korea and Colombia, during the first quarter.
Beef margins of the company’s North America division, however, continued to be pressured by the livestock cycle in a seasonally weaker quarter, JBS said. This was in contract with JBS’s Brazil beef business, where net sales rose by nearly 17% annually, driven by higher volumes sold and more cattle availability.
Also in Brazil, JBS said its Seara processed foods division recorded net revenue of 10.3 billion reais, stable compared to the same period last year.
Yet, the company reported a significant increase of 10 percentage points in the EBITDA margin from the first quarter of 2023 at that division, partly reflecting lower grain costs and better supply and demand dynamics.
(Reporting by Roberto Samora and Ana Mano; Editing by Leslie Adler and Chris Reese)
