JBS, the Brazil-based meat giant, has booked a first-quarter profit of BRL422m (US$136.5m) – compared to a loss of over BRL2.7bn a year earlier – but the company saw its sales decline.

The group posted a net profit of BRL422.3m for the three months to the end of March, up sharply from the BRL2.74bn loss it incurred in the opening quarter of 2016 when it incurred more than BRL4.7bn in financial expenses. JBS reported operating income of BRL675.3m, versus an operating loss of BRL3.8bn a year earlier.

However, the company’s net revenue slid 14.3% to BRL37.62bn, with sales at its domestic unit Seara and at its Mercosul arm covering the wider South America region offsetting growth from its US beef, chicken and pork operations and from Moy Park, its European unit.

CEO Wesley Batista said: “We started 2017 performing well in our international business units, boosted by strong demand in the markets where we operate. Our operations in South America, on the other hand, continued to face a challenging scenario, mainly due to the strong appreciation of the real against the US dollar, which was BRL3.91 in 1Q16 and BRL3.14 in 1Q17, impacting the profitability of our exports from Brazil.”

During the quarter, JBS was embroiled in the Carne Fraca, or Weak Flesh, Brazilian police investigation into a number of the country’s meat processors over alleged payments to inspectors to overlook unsanitary practices. Brazil saw a number of countries place restrictions on meat exports from the country, although some have since relented.

JBS denied any wrongdoing, although the affair did lead to the company having to idle production plants and furlough workers.

Last week, meanwhile, JBS was again reported to be giving consideration to delaying the IPO of its international operations, although the company declined to comment.

Also last week, it was reported authorities in Brazil are probing loans received by JBS from local development bank BNDES.

Reuters reported Brazilian police is investigating suspected fraud in the transactions and had issued orders for Batista and his brother Joesley, the chairman of JBS, in for questioning.

In a statement to just-food, JBS said BNDES had not made loans to the company but made investments, buying a stake in the business. It added: “JBS has always conducted its relationships with public and private banks in a professional and transparent manner. All BNDES investment in JBS was made through BNDESPar, the investment arm of BNDES, in accordance with all relevant market rules and legal requirements. These investments were carried out in accordance with Brazilian capital market legislation. The investments are public and available on the CVM website and the JBS investor relations website.”