BRAZIL-based JBS S.A. — the world's largest meat processor — credited its acquisition of Seara for growth in profits for 2013.
JBS posted overall net profits of 926.9 million reals in 2013, a 28.9% increase from 2012, while its earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 6.1 billion reals, 39% more than the previous year.
For the fourth quarter of 2013, JBS reported consolidated net income of 140.7 million reals, which is nearly double the net income of the year-ago fourth quarter. In addition, the net consolidated EBITDA was 1.874 billion reals, up 60% from year ago.
The revenue increase last year was a result of sales growth in all JBS business units, with JBS Mercosul reporting a strong increase of 43.3% from 2012.
"The global economic scenario looks favorable. We believe that recovery of American currency has not yet come to an end. Our feeling is that the dollar continues to strengthen and that our exports, as well as the value of our assets, will continue to benefit," said Wesley Mendonca Batista, JBS global chief executive officer.
For the U.S. business units, JBS USA Beef — which includes businesses in the U.S., Canada and Australia — recorded revenues of $18.6 billion for 2013, a 6.3% increase from 2012. Beef revenues were $4.8 billion in the fourth quarter, down 1.0% from the same period of 2012. The number of cattle processed grew 14.3% in 2013.
Meanwhile, JBS USA Pork processed fewer hogs, which resulted in lower revenues. Revenues declined 5.3% between the fourth quarters of 2012 and 2013, but for the full year, revenues saw marginal growth of 0.5% over 2012, coming in at $3.5 billion for 2013.
Net revenues for Pilgrim's Pride, the U.S. chicken segment, advanced 3.6% from 2012, totaling $8.4 billion for 2013 — the best year in its history. Pilgrim's reported $2.0 billion in fourth-quarter revenues, down 6.5% from the same quarter in 2012.
An increase in net profit reporting was attributed to recorded revenues for JBS Mercosul and Pilgrim's Pride Corp.
In the case of JBS Mercosul, sales increased 43.3% from 2012 to 25.820 billion reals in 2013. This amount included the third-quarter performance of JBS Foods, which resulted from the acquisition of Seara and its union with JBS Chicken Brazil.
Moreover, consolidated exports registered growth of 19.6% over 2012, reaching nearly $12 billion in 2013 due to increases in consumption, demand and the number of destinations JBS exports to, which now stands at more than 150 countries.
Looking ahead, Batista noted that consumers in many nations are seeking convenience and practicality in food options, which means a business model focused on offering more customized products, ease of preparation and higher value added.
JBS forecasted a strong growth trend in global protein consumption for all species (Figure). Nevertheless, tight beef and pork supplies at a time of robust demand will create challenges. On the other hand, availability of poultry will remain stable.
As a result, price adjustments may occur in the short term, although JBS believes the price changes can happen without affecting demand.