Lower cattle prices lift profit performance for JBS Australia first quarter operations

Jon Condon, 15/05/2024

JBS’s global footprint of operations continues to play a crucial role in ironing-out regional inconsistencies, the company’s first quarter results released overnight show.

The quarter ended 31 March was marked by a period of many challenges for the company, with its operational footprint extending across North and South America, Australia and parts of Europe, in beef, lamb, pork and chicken.

Those challenges included the imbalance between supply and demand, persistent inflation in several global regions and high input costs, among others.

In addition to the strength of the company’s global platform, over the past year actions had been implemented, focusing on people and operational excellence, shareholders were told.

“Thus the first quarter results prove the recovery of results in all business units, with the exception of JBS Beef North America, which is facing a challenging cattle cycle,” the company said.

In the last 12 months, JBS’s adjusted EBITDA reached U$4.3 billion, with an adjusted EBITDA margin of 5.8pc, shareholders were told.

Last quarter produced a global adjusted pre-tax earnings of US$1.3 billion, net profit of US$332 million and net revenue of $18 billion up 10pc on last year.

Gilberto Tomazoni

“The strength of our results once again highlights the importance of our geographical and protein diversification. In a traditionally weaker quarter for the global protein industry, the beef businesses in Brazil and Australia captured cattle cycle highs in both countries,” global chief executive Gilberto Tomazoni said.

“In contrast, the US Beef continues to experience weaker margins due to where we are in the region’s cattle cycle and seasonal conditions,” he said.

“We remain focused on what we can control, to become increasingly competitive in each market where we operate. For this reason, we have an absolute focus on our operations, cost management, productivity increases, portfolio optimisation, and price – regardless of geography and economic fluctuations.”

“We are confident that the strength of our platform, combined with our financial performance, and our commitment to excellence and innovation, will allow JBS to continue its growth trajectory, generating value for our stakeholders and the communities in which we operate,” Mr Tomazoni said.

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Australian operations

JBS’s Australian operations, embracing beef, sheepmeat and pork processing, plus the Primo smallgoods and Huon Tasmanian salmon aquaculture businesses, reported (US$) net revenue for the quarter of $1.446 billion, down 16pc from the previous quarter, but 3.7pc higher than the same time last year.

Adjusted pre-tax earnings for Australia were $124m, 30pc behind the previous December quarter but 9.3pc above the first quarter last year. Those results included the impact of a 5pc appreciation in the average exchange rate, which went from R$5.19 over the past 12 months.

Reflecting recent industry-wide production and export trends, JBS Australia’s beef business grew 18pc compared with the same quarter last year, due to the growth in volumes in both the domestic and export markets. The improvement in EBITDA margin (8.6pc) was a reflection of lower Australian cattle prices, given the greater availability of animals due to the more favourable production cycle, the company said.

According to Meat & Livestock Australia, the price of cattle in Australia fell 22pc year-on-year in the first quarter.

US margins now pressured

In the company’s US beef processing division, margins in the first quarter continued to be pressured by the cattle cycle, especially in a seasonally weaker quarter. According to data released by the USDA, live cattle prices remained at high levels, growing 12pc year-on-year in the first quarter.

As the price of cattle represents about 85pc of the cost of the (US) product sold, and the growth in costs was higher than the growth in the cutout (+8pc year on year), profitability came under pressure in the period, shareholders were told.


  • Beef Central will file a separate report next week, based on comments made during JBS’s 1Q investor briefing








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