BRAZIL: Tax charge, US weakness hit JBS
- Net profit drops to BRL116m
- Higher tax charge adds to "pink slime" woes
- Sales rise 9.1%
Brazilian meat group JBS has revealed a drop in first-quarter profits, as the bottom line was hit by higher tax charges and a fall in income from its US beef business.
The company booked a net profit of BRL116m (US$58m) for the first three months of the year, down from BRL146.9m last year.
During the quarter, income taxes at the meat group surged to BRL123m, compared to a one-time gain of BRL17.4m after the group received a tax rebate in the comparable period of 2011.
EBITDA fell 16.7% to BRL696.5m, JBS revealed in a regulatory filing released late yesterday (15 May). The company said that the decline was primarily the consequence of EBITDA losses totalling US45.5m, down from positive EBITDA of US$269.7m, at its US beef unit.
The US beef industry was severely hit by the controversy surrounding so-called "pink slime" during the quarter, which caused consumer demand to drop and prices to fall.
The company said the result highlighted the importance of its geographical diversity and strong presence across the protein categories, including beef, pork and chicken.
Net revenue increased 9.1% to BRL16bn in the quarter and JBS highlighted a number of investments it has initiated in order to drive continued sales growth.
During the period, JBS launched into the Brazilian poultry sector with the lease of assets from Frangosul and expanding its Brazilian beef operations with the addition of 12 slaughterhouses. JBS said that these investments should add annualised revenue of BRL4.5bn.
Click here for the full earnings update.
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