JBS’s USA beef division, including Australian operations, contributed strongly to a solid first quarter financial result presented to the market this morning.
Net revenue for the quarter was US$5.2 billion, almost 15 percent higher than the same quarter last year.
Pre-tax earnings reached US$187 million, up 3.6pc on a year ago.
JBS does not report Australian financial performance separately, but as part of the company’s US division, also including Canada.
For the company’s global operations in four continents, JBS reported a net income of R$1.4 billion and a R$33.8 billion net revenue for the first quarter, an increase of 28pc year-on-year. Pre-tax earnings were R$2.76 billion, 57pc higher than the same period in 2014.
The results took into account the $1.4 billion payment during the quarter for the acquisition of Primo Smallgoods Group in Australia and Big Frango in Brazil.
“Our strategy over the last years allowed us to create a global production platform, chief executive Wesley Batista told investors. “Today we operate a diversified portfolio, with value-added products and strong brands worldwide. This strategy is allowing us to generate more solid and consistent results ongoing,” Mr Batista said.
“JBS management remains focused on operational excellence, in the quality of its products and services with a management committed to generate value to its shareholders and the opportunity of a better future for all its employees.”
The company’s new JBS Foods value-added division posted net revenues up 39.4pc year-on-year, partly dueto acquisitions made during the year, as well as from operational efficiency gains and organic growth.
Prepared and processed products grew by 24pc in volume, combined with a 7.6pc increase in average sales prices.
“JBS Foods continues to generate synergies and increased efficiencies at the acquired companies, while constantly improving product quality, service level, and execution at the points of sale, all of which are reflected in successive market share gains posted by the company,” Mr Batista said.
In the JBS US business unit, including Australia, net revenues expanded 14.8pc compared to 1Q14, supported by increases in sales prices of 16.7pc in domestic and 6.4pc in export markets. Volumes sold in the international market increased 4.2pc over 1Q14, while volumes in the (US) domestic market remained stable. Slaughter rates decreased 1.1pc in comparison to the same period last year, but that figure reflects US herd size limitations, rather than trends in Australia.
EBITDA was US$186.6 million in the quarter, compared to a negative US$22.5 million in 1Q14.
In Australia, the weakening of the local currency partially compensated the increase in raw material costs and operations, preserving the good performance presented in earlier quarters, mr Batista said. “Australia has unique sanitary conditions and has benefited from free trade agreements signed with the major beef importers in Asia,” he said.