Brazilian meat group JBS booked a decline in third-quarter net profit, dragged down by financing costs incurred to fund the acquisition of poultry business Seara.
The company said yesterday (13 November) net profit fell to BRL76.7m (US$32.9m), down from BRL118.1m in the comparable period of last year.
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JBS struck a deal to buy Seara Brasil and a Uruguay leather business from Marfrig in June, valuing the two businesses at BRL5.85bn. In order to fund the acquisition, JBS raised its debt levels. As a result, the group ended the period with leverage of 4.03x EBITDA. Excluding the Seara acquisition, JBS’s leverage would have stood at 2.9x EBITDA.
Nevertheless, JBS was able to book an improved underlying performance. The company said net revenue rose 25.1% in the period, with organic growth accounting for 87.6% of the gain. Consolidated EBITDA totalled BRL1.7bn, up 24% on “stable” margins.
JBS shares rose 2.33% following the announcement, to close at BRL8.43 yesterday on the BM&FBOVESPA.
Click here to view the release from JBS.
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