Brazil's JBS posts Q2 loss citing chicken glut, tight US beef margins (updated)

Pilgrims Pride

14/08/2023 22:17

(Adds details from earnings statement, quote from paragraph 3
onwards)
       SAO PAULO, Aug 14 (Reuters) - Brazilian meat company JBS
SA  JBSS3.SA  on Monday reported a second-quarter loss citing
the negative effects of an over-supplied global chicken market
and tighter margins for its beef business in the United States,
where it gets most of its sales.
    JBS reported a net loss of 263.6 million reais ($47.77
million), the second consecutive negative result in 2023.
        The company's earnings before interest, tax,
depreciation and amortization, a measure of operating income
known as EBITDA, came in line with a consensus forecast of 4.47
billion reais  ($888.46 million), but was down 57% on the
year-ago period, when the company's operating and financial
performance were strong. 
        In the quarter, JBS said its North American beef margins
shrank from the same time a year ago, reflecting a reduction in
the supply of livestock in the region. Citing USDA data, JBS
said cattle prices rose 26% last quarter to $179/cwt while
wholesale beef prices grew by 17% in the same period.
    "For over the next few months, we see a scenario of greater
balance in the supply of poultry with positive potential for
prices," JBS said of the outlook for that market. 
        Its Pilgrims Pride division, which processes poultry in
the United States, for example reported a 49% decline in EBITDA
to 3.635 billion reais.
        At the same time JBS' U.S. pork division had a 15%
annual drop in revenues, reflecting a 21% fall in wholesale pork
prices due to excess supply, JBS said.      
        In Brazil, the company's beef division reported a 10%
rise in revenue in dollar terms, as a result of higher volumes
exported in the second quarter after a fall in the first quarter
caused by a temporary Chinese ban on Brazilian beef products. 
    On the other hand, JBS' Seara prepared foods division in
Brazil, which processes pork and poultry, had a 3.5% drop in
revenue reflecting smaller export sales.    

    ($1 = 4.9524 reais)
  

 (Reporting by Ana Mano; Editing by Chris Reese and Sonali Paul)
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