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JBS Purchases Canadas XL Foods

JBS gets sharp Q4 boost from ASF

Company sees 332% rise in fourth-quarter net income compared to 2018.

The positive impact African swine fever (ASF) has had on the global meat and poultry business was reflected in the latest financial results of global meat company JBS. The company reported March 25 that net income was 2.4 billion reals ($480.8 million) in the fourth quarter of 2019, up 332% from the same quarter in 2018. Analysts had forecasted that fourth-quarter net income would be 2.19 billion reals.

Net income for 2019 was 6.1 billion reals, up from 25.2 million reals in 2018. Net revenue was 204.5 billion reals ($51.7 billion), the highest ever reached by the company.

“I am very proud of everything we are doing in each one of our business units and how we face the challenges of each day. What we do now is reflected in what we will be tomorrow and in the future. The results we present today are a clear demonstration of this,” JBS Global chief executive officer Gilberto Tomazoni said. “We had an excellent financial result and an expressive evolution of our operation in 2019. The strong commitment of the leadership and the more than 242,000 employees of the company, combined with a focus towards operational excellence, innovation and sustainability, led us to achieve the best level in our history.”

Segment results

JBS USA Beef posted net revenue of 87.2 billion reals in 2019, an increase of 10.9% in relation to 2018, and earnings before interest, taxes, depreciation and amortization (EBITDA) of 8.0 billion reals, 27.0% higher in relation to 2018, with a margin of 9.2%.

“In North America, the fundamentals of the beef industry continue to be solid, supported by the good availability of cattle in the U.S., as well as the favorable economic conditions, which supported the demand for beef in the domestic market,” the company reported.

Further, it relayed that its Australian beef and lamb exports to China grew 80% in sales during 2019.

JBS USA Pork posted net revenue of 23.5 billion reals in 2019, an increase of 13.0% compared to 2018, and an EBITDA of 2.6 billion reals, with an EBITDA margin of 11.1% compared to 9.6% in 2018.

“In 2019, the U.S. pork industry export volumes increased 10% in relation to 2018, highlighting the Chinese demand for pork, which accelerated significantly in the second half of the year. The higher export volumes, along with favorable economic conditions in the domestic market, sustained the growing demand for pork products,” JBS said.

The company said it is still in the in the process of eliminating the use of ractopamine from its pork supply chain.

“We also continue to closely monitor events related to African swine fever in Asia and their impacts on the global pork trade,” JBS added.

Pilgrim’s Pride Corp. posted net revenues of 45.0 billion reals, 12.9% growth versus 2018, and EBITDA of 5.3 billion reals, with an EBITDA margin of 11.8%.

Seara posted net revenue of 20.4 billion reals in 2019, 15.2% higher than 2018. JBS Brazil posted net revenue of 32 billion reals, an increase of 15.9% from 2018.

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