JBS misses profit estimates despite better US beef results

Brazil's JBS, the world's ‌largest meatpacker, ​posted on Monday a worse-than-expected profit decline in the third quarter, despite operational improvement in its US beef business. Adjusted earnings ‌before interest, taxes, depreciation and amortization (EBITDA) stood at $1.18 billion for the July-September quarter, a 36% fall year-over-year and below the $1.32 billion expected in an LSEG poll of analysts.

JBS, which has ‌operations in countries such as Brazil, the US and Australia, "faced a more challenging operating environment ‌across several of its business units," Chief Executive Officer Gilberto Tomazoni wrote in the earnings report. Still, the beef unit in North America, which represents around a third of JBS' global revenue, was one of the ⁠only units within ​the group to ⁠improve margins year-on-year, as scarce cattle supply in the US has hit profitability in recent quarters.

JBS said the ⁠US lifting the ban on imports of Mexican cattle, along with industry-wide cuts in processing capacity, helped ​results. The firm itself closed two plants in the US in June and has ⁠integrated management of local operations to improve efficiency. JBS' total revenues ticked up less than 1% to $22.74 billion, compared ⁠with ​the $22.82 billion in the LSEG poll with analysts. Meanwhile, net profit came in at $164 million, a more-than-70% slump and below the $256 million consensus from analysts.

In a separate statement, the ⁠company said it purchased personal hygiene goods maker Flora from JBS' controlling group J&F. The deal ⁠was valued at $542 ⁠million, including debt, with the equity portion of the transaction set to be paid with Class A shares held in treasury, JBS ‌added.