JBS, the Brazil-based meat giant, saw pressure on margins on the company’s added-value Seara unit and on its US-based beef and chicken businesses in its second quarter.
The group posted a 19.1% fall in EBITDA to BRL2.9bn (US$927.7m) for the three months to the end of June despite a 12.3% increase in net revenue to BRL43.7m.
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JBS’s Seara, USA Beef and USA Chicken divisions all saw their EBITDA fall in the second quarter.
At Seara, JBS’s domestic chicken and pork business, the company said it endured a more than doubling in the cost of corn in the quarter, which offset an increase in sales from the division.
The group said its JBS USA Beef unit, which also includes businesses in Canada and Australia, saw its EBITDA slump 88% year-on-year amid a 12% fall in sales, costs from the expansion of a plant in Utah and high cattle prices in Australia.
Declines in domestic and export poultry prices saw EBITDA from JBS USA Chicken, also known as Pilgrim’s Pride, fall by more than a third. Pilgrim’s Pride reported a 1.2% decrease in net revenue.
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By GlobalData“We are facing different opportunities and challenges in each region where we operate, which reinforces the relevance and the successful strategy to diversify in various markets and segments. We have a highly engaged and qualified team working with optimism, energy and confidence, investing in the strengthening of our brands and towards the sustainable development of our business,” CEO Wesley Batista said.
The company reported a net loss of BRL986.9m for the six months to the end of June, compared to BRL1.78bn a year earlier. JBS’s bottom line was dented by finance costs booked in the first quarter; in the second quarter, JBS generated a net income of BRL1.67bn, versus income of BRL252.2m a year ago.
At JBS USA Pork, revenue jumped more than 71% in the second quarter, helped by the assets the company acquired from Cargill last year. EBITDA more than doubled, boosted by exports and “good results” from bacon.
JBS posted company-wide net revenue of BRL87.58bn for the first six months of the year, up from BRL72.72bn in the first half of 2015.
