Sao Paulo | Reuters — Brazilian meat company JBS SA on Monday reported a second-quarter loss citing the negative effects of an oversupplied global chicken market and tighter margins for its beef business in the U.S., where it gets most of its sales.
JBS reported a net loss of 263.6 million reais (C$73.8 million), the second consecutive negative result in 2023.
The company’s earnings before interest, tax, depreciation and amortization (EBITDA) came in line with a consensus forecast of 4.47 billion reais (C$1.25 billion), but was down 57 per cent on the year-ago period, when the company’s operating and financial performance were strong.
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In the quarter, JBS said its North American beef margins shrank from the same time a year ago, reflecting a reduction in the supply of livestock in the region.
Its North American beef division, which includes its packing and processing operations in Canada, reported adjusted EBITDA of US$87.5 million on revenue of US$5.81 billion for the quarter, down from US$620 million on US$5.52 billion in the year-ago period.
Citing USDA data, JBS said cattle prices rose 26 per cent last quarter to US$179/cwt while wholesale beef prices grew by 17 per cent in the same period.
“For over the next few months, we see a scenario of greater balance in the supply of poultry with positive potential for prices,” JBS said of the outlook for that market.
Its Pilgrims Pride division, which processes poultry in the U.S., for example reported a 49 per cent decline in EBITDA to 3.635 billion reais.
At the same time JBS’ U.S. pork division had a 15 per cent annual drop in revenues, reflecting a 21 per cent fall in wholesale pork prices due to excess supply, JBS said.
In Brazil, the company’s beef division reported a 10 per cent rise in revenue in U.S. dollar terms, as a result of higher volumes exported in the second quarter after a fall in the first quarter caused by a temporary Chinese ban on Brazilian beef products.
On the other hand, JBS’ Seara prepared foods division in Brazil, which processes pork and poultry, had a 3.5 per cent drop in revenue reflecting smaller export sales.
— Reporting for Reuters by Ana Mano in Sao Paulo; includes files from Glacier FarmMedia Network staff.
