JBS Profit Surges to Two-Year High on Booming Chicken Demand
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JBS SA, the biggest global meat producer, is reaping the benefits of a world that’s eating more chicken, sending demand surging and helping the company post its best quarterly profit in two years.
The Sao Paulo-based company posted net income of 1.73 real (30 cents) per share in the three months ending in September, according to a Nov. 13 statement. That marked a sixfold increase from a year earlier and was the highest since 2022, allowing profits to beat the average of analyst estimates in a Bloomberg survey.
JBS ranks No. 68 on the Transport Topics Top 100 list of the largest private carriers in North America.
JBS and rivals including Tyson Foods (No. 9 on the private TT 100) have emerged as winners from a drop in prices for corn and soybeans, which are used in livestock feed. The cost of feeding poultry is declining at a time when demand for chicken is surging. That’s led analysts to more than double their 2024 earnings forecast for JBS even as the company navigates a U.S. cattle shortage that has severely constrained profits at its North American beef business.
RELATED: Tyson, JBS Set for Earnings Spike From Poultry Rebound
In a separate statement, JBS said it expects full-year earnings, excluding some items, in a range between $6.9 billion and $7.1 billion, beating even the highest of analyst estimates compiled by Bloomberg.
In the third quarter, chicken units Seara SA, which posted record profit margins, and Pilgrim’s Pride Corp. accounted for more than 60% of the annual increase in JBS’s earnings before items such as taxes and interest. The company also benefited from increased profits from its U.S. pork business as well as from its Brazilian and Australian beef operations.
JBS is taking advantage of product and geographic diversification at a time when the North American beef segment, its largest, is operating close to break-even levels, CEO Gilberto Tomazoni said. He also cited lower grain prices and strong demand for all proteins globally as positive factors for earnings.
A cash windfall has allowed the meat producer to quickly slash debt. Net borrowings dropped to 2.15 times EBITDA in the third quarter from 4.87 times a year earlier, giving JBS more room to make acquisitions and return capital to shareholders.
The board of the company controlled by the billionaire Batista brothers on Nov. 13 approved the payment of an extra dividend of 1 real per share in January, totaling roughly 2.2 billion reais, Chief Financial Officer Guilherme Cavalcanti said. That follows a dividend distribution of 4.4 billion reais in October.
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