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JBS Purchases Canadas XL Foods

JBS sees improved profits from ASF

Company expects exports to continue to grow in 2020 as protein shortage increases.

Increased demand and higher prices due to the spread of African swine fever (ASF) supported JBS S.A. in the 2019 third quarter, the company’s results revealed. Net income in the quarter was approximately $85 million (356.7 million reals), compared to a loss of approximately $32 million in the third quarter of 2018.

“We are very pleased with the results we are presenting this third quarter. Continuously and consistently, over the last nine quarters, we have confirmed the strength of our strategy, based on its main pillar, operational excellence, which, for us, translates into being the best operator in the market,” Global JBS chief executive officer Gilberto Tomazoni said.

The company’s U.S. operations showed improved year-over-year results. Net revenue rose 11.4% to $8.45 billion for JBS USA Pork and rose 3.8% to $5.63 billion for JBS USA Beef. Pilgrim’s Pride net revenue also improved, rising 3% to 2.78 billion.

Regarding its pork segment, JBS said U.S. export volumes increased 16.8% relative to the third quarter of 2018.

Despite tariffs imposed by the Chinese government on pork imports from the U.S., the financial results highlighted the significant evolution in China's demand for pork, the company reported.

JBS said results for the beef unit were a consequence of good availability of cattle as well as strong demand for beef in the U.S. Additionally, the company said it believes the fundamentals for the beef industry in the region currently are and can remain solid in the following quarters.

During the quarterly results call, André Nogueira, CEO of  JBS USA, said the company expects the U.S.  to have “very relevant” growth in exports next year. However, the extent of the growth is hard to predict at this point, he said.

“If you just saw what happened last quarter, the growth is already above 50%, and I think the number for next year is higher than that,” Nogueira said.

The growth, he noted, depends on global demand and whether the U.S. and China can strike a deal.

Nogueira said the U.S. is extremely competitive and has a lot of space to grow exports. The growth that started to happen in the third quarter and is happening in the fourth quarter will continue next year, he added.

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