PROCESSING operations in the US and Australia were among the better performers during the second quarter in JBS’s global business, financial results released this morning suggest.
In its second quarter earnings release, JBS’s broader beef, chicken, pork and value-added processing operations in South America, North America and Australia reported net revenue worth around R45.2 billion (the equivalent of $16.2 billion in A$ terms), an increase of 8.4 percent compared with the same period last year.
Gross profit totalled the equivalent of A$2.52 billion, a 13.5pc growth, while adjusted pre-tax earnings was A$1.51b, 12.8pc higher than last year. Adjusted net income was A$1.08b (excluding a significant impact from a truckers strike in Brazil) and the reported accounting loss was worth around A$327 million.
Highlights were the JBS USA Beef division (which includes Australian processing operations) and JBS Brazil, which posted pre-tax earnings growth of 75.8pc and 37.4pc, respectively.
The USA beef division (including Australian processing, lotfeeding and other operations) posted net revenue of US$5.59 billion, 1.3pc higher than the same quarter last year.
In the US, beef demand had remained strong through the quarter due to solid economic fundamentals and supportive retail and foodservice channels, which had been highlighting beef in their promotional efforts, JBS reported to shareholders.
Additionally, according to USDA data, fresh beef exports from the US remained in a growth trend and increased by 26.8pc in revenue when compared with the second quarter last year.
This favourable environment, coupled with the company’s initiatives to diversify its product portfolio and focus on partnerships with strategic customers, had enabled JBS operations in North America to increase volumes in both domestic and international beef markets.
In Australia, a greater supply of cattle in comparison to 2Q17 (due largely to continued drought turnoff), coupled with JBS’s focus on operational efficiencies contributed to a significant improvement in the region. The company also nominated its diversified portfolio in Australia, with higher value-added beef sales as well as products from Primo Smallgoods, as a contributing factor.
Pre-tax earnings in the USA beef division for the second quarter was US$570m, 75.8pc higher year-on-year.
Net revenue was down last quarter in other divisions including US pork, US chicken and JBS Brazil. Mostly due to lower exports and truckers strike action in South America.