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JBS quarterly net income skyrockets by over 300 percent

26 March 2020

Meat packing giant JBS SA reports quarterly net profit of 332 percent over the prior-year period, citing surging sales to China.

According to reporting from Reuters, China dramatically increased food imports dramatically after an outbreak of African swine fever, benefitting JBS.

The fourth-quarter net profit rose to 2.43 billion reais ($482.5 million), JBS said in an earnings statement.

The result beat analysts' forecasts for net income of 2.19 billion reais.

JBS executives told Reuters that the company is in a good place to navigate market turbulence amid the coronavirus pandemic.

JBS has been able to reduce debt over the past year and has no current need to raise additional capital, Chief Financial Officer Guilherme Cavalcanti said in a phone interview. The company expects to save $100 million in interest payments in 2020, he said.

"Happily, we stretched debt maturities at the right moment," he said.

Chief Executive Officer Gilberto Tomazoni said demand from China will likely remain strong as supply disruptions caused by African swine fever persist.

Aside from that, Chinese cities are easing lockdowns related to the coronavirus pandemic, which should be positive for demand.

Tomazoni said JBS is ready to weather the storm stemming from the health crisis, given the company's diversified production base and seniority of management.

“Based on the size of the ship, it will rock more or less with the waves,” Tomazoni said in the interview.

Plans to list JBS shares in the United States remain a priority, though a timeline is uncertain given market jitters related to coronavirus, the CEO said.

For the fourth quarter, earnings before interest, taxes, depreciation and amortisation, a measure of operating income, were 5.67 billion reais in the quarter, slightly higher than Refinitiv analysts' estimates of 5.53 billion reais.

According to the earnings statement, net revenue grew by almost 21 percent to 57 billion reais.

At its Brazil beef division, JBS said sales to China almost doubled, with volumes rising 61 percent while average prices grew by 23 percent.

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