ANIMAL protein giant JBS reported record net revenue of US$19.9 billion across its global operations for the quarter ended 30 September –  up 6.4pc year-on-year – with net profit soaring to US$693m, up 490pc on last year.

The third quarter results reaffirmed the company’s positive outlook for the year and highlighted the strength of JBS’ global, multi-protein platform, the company told shareholders.

With the exception of JBS Beef North America which is facing a challenging cattle cycle, all other business units including Australia showed improvement compared to the same period last year.

The 3Q results prompted JBS to announce a divided next January of US17c per share, worth around US$382 million. Over the past six years, JBS had delivered an average total annual return to shareholders of about 20pc in US dollars, demonstrating its commitment to growth and value distribution, the quarterly financial summary said.

“Strong global protein demand, favorable grain costs, and our agility in managing product and market mix, alongside our focus on high-value products and innovation, complement the results of already-implemented operational improvements in efficiency, productivity, and commercial enhancements,” JBS said.

While the company’s US beef  operations are still feeling the effects of the North American cattle cattle cycle following drought, JBS Brazil posted one of its best performances, with an 11.6pc margin driven by the beef segment.

JBS’s Australia operations, encompassing beef, lamb and pork processing plus the Primo smallgoods division and Huon salmon aquaculture business in Tasmania, saw net revenue for the quarter of US$1.78b, up 13pc year-on-year, and adjusted pre-tax earnings of US$144.3m – up 39pc.

Growth in net revenue was explained by an 8pc increase in volumes sold in both the domestic and export markets, and 5pc increase in average prices, JBS said.

That comment is supported by recent record export volume shipments out of Australia, as reported here.

An improvement in the Australian division’s EBITDA margin to 8.1pc was a consequence of increased operational efficiencies, aimed at reducing costs and increasing revenue, investors were told.

However despite the ample availability of livestock due to the more favourable cycle, Australian profitability was pressured by an increase in cattle prices, JBS said. According to Meat & Livestock Australia, cattle prices in Australia grew 25pc year-on-year in the third quarter.

Australia continued to capture the benefits of the cattle cycle, with a 9.8pc margin in the third quarter despite rising livestock prices.

“The outlook for the Australian business remains favourable in the coming quarters. We’re focused on growth fueled by diversification, innovation, value-added products, and strong branding,” the company said.

In contrast JBS’s US beef division is labouring  under soaring cattle prices driven by lower supply.

Adjusted pre-tax earnings last quarter in US beef was US$36.7m, down 60.6pc on this time last year.

The US beef operation’s margins continued to be pressured by the livestock cycle, the company told investors, despite strong demand in the period. According to data released by the USDA, fed cattle prices remained at high levels in 3Q24. As a result, since the price of cattle represented 85pc of the cost of production, profitability was under pressure during the period.

Despite the increased pressure on margins due to the US cattle cycle, the company remains focused on operational and commercial execution in order to protect its profitability in the region, it said. Initiatives underway included improving pricing, optimising product mix, increasing yield per carcase, and increasing manufacturing efficiency.

“All of these actions are essential to face this more challenging cycle in US beef,” JBS said.

Cost of Goods Sold comparisons

In a breakdown of cost of good sold (COGS), the contrast between current livestock prices in the US and Australia was clearly evident. Raw material (livestock in the US beef division last quarter accounted for 89.8pc of goods sold. In Australia, the figure was 75.8pc.

The COGS figure for JBS Brazil last quarter was 87.5pc for livestock purchase. JBS Brazil reported net revenue of US$3.3b last quarter, up 10pc year-on-year, reflecting higher sales volumes, mainly in the international markets.

The labour component of the COGS study again showed the vast gap between Australian processing and elsewhere. JBS Australia’s labour component of COGS last quarter was 17.1pc, compared with 5.6pc for the company’s US beef division, and 5.1pc in Brazil.