Higher meat prices hike up JBS’ domestic sales

The business reported a net revenue of R$49.4bn (US$13bn) for the third quarter compared to R$41.1bn (US$10.8bn) during last year’s quarter. JBS said its Brazilian units – JBS Brazil and Seara – had contributed significantly to the sales jump, growing revenue by 37.2% and 8.8% respectively.

The company chalked up adjusted pre-tax profit of R$4.4bn (US$1.2bn), up 2.6% on the same period in 2017, hailing this as the highest profit it had ever recorded in a single quarter.

Seara revealed that higher sales prices in the domestic and export markets had ramped up its revenues, but admitted it was still feeling the effects of a truckers strike as total volumes fell by 6.7%.

Average sales prices in the domestic market increased by 11.9% for fresh poultry and 8.4% for prepared foods. In export markets, sales prices of fresh poultry increased by 25.1% and 21.6% in prepared foods.

As a result of lower poultry production, volumes had been prioritised according to profitability to markets such as Europe, Saudi Arabia, Japan and South Korea.

Brazilian pork prices also declined by 11.1% due to Russia’s temporary ban on pork from the country.

In contrast, JBS Brazil reported a 29.3% increase in the number of animals it processed, particularly for the domestic market. Revenue grew by 23.2% thanks to an increase of 18.1% in volume and 4.4% sales prices.

Devaluation of the Brazilian real was a major factor for JBS Brazil’s net revenue for the export market. Net revenue for the export market grew by 54.1% as a result of 30.5% higher volumes and 18.1% higher sales prices.

For the quarter, approximately 73% of JBS global sales came from markets where the company operates and 27% from exports.