JBS, the Brazilian meatpacking behemoth, has reported an astonishing 78% increase in yearly net profit, owing mostly to strong results in its poultry and pork divisions in both Brazil and the United States. The company, the world’s largest meatpacker, declared a net profit of 2.92 billion reais (roughly $521 million) in the first quarter of this year, up from 1.64 billion reais the previous year.
This substantial growth was achieved despite traditionally weaker consumer demand in the Northern Hemisphere due to the winter season. According to JBS, the first quarter typically experiences a slowdown in sales compared to the end-of-year holiday season. However, the company managed to defy seasonal expectations through strategic management and a diversified global protein portfolio.
Gilberto Tomazoni, the global CEO of JBS, attributed the strong performance to the company’s well-structured international operations. In a statement, he said, “Quarter after quarter, our results prove that we made the right choices in building and managing our global multi-protein platform.” He also noted in an interview that their widespread production across Brazil, the United States, and Australia has insulated them from the worst effects of the ongoing global trade disputes.
In Brazil, JBS’ Seara processed foods unit performed exceptionally well, while in the United States, the company’s Pilgrim’s Pride chicken subsidiary recorded its highest-ever earnings before interest, tax, depreciation, and amortization (EBITDA) margins. Overall, JBS posted an EBITDA of 8.92 billion reais, slightly exceeding analyst expectations of 8.77 billion reais, indicating efficient operational performance across various sectors.
The company’s net revenue surged by 28% year-on-year to reach 114.1 billion reais. However, it did see a slight 2.2% decline from the previous quarter. Notably, while its North American beef division saw a 36% increase in revenue to 37.5 billion reais, it faced significant headwinds due to a cattle shortage in the U.S., resulting in an operating loss of 587.2 million reais.
Rising cattle prices in Brazil have also raised concerns about future profitability, with analysts at Genial Investimentos warning about possible margin pressures. Furthermore, investment bank Goldman Sachs pointed out that a potential escalation of the global trade war could disrupt U.S. meat exports and lead to a surplus of poultry and pork, potentially affecting market prices.
Despite these concerns, Tomazoni dismissed any immediate worries about oversupply in the U.S. market, especially for chicken and pork products. He emphasized that the company remains confident in its ability to adapt to market dynamics and maintain profitability.
China continues to be a crucial export destination for JBS, accounting for about 23% of its $4.9 billion in export sales during the last quarter. The sustained demand from the Chinese market reinforces the importance of international trade in the company’s growth strategy.
Looking ahead, JBS is preparing for a major financial milestone as it plans to list its shares on the New York Stock Exchange. The move is pending approval from minority shareholders, with trading potentially starting next month. This development could further elevate JBS’s global presence and open new avenues for capital and expansion.
