February 23, 2009
JBS reports Q4 loss on falling beef prices, lower margins
JBS SA, the world's largest beef processor, has reported a fourth-quarter loss due to falling beef prices and lower margins.
JBS lost BRL53.5 million in the fourth quarter compared with a third-quarter profit of BRL270.1 million, according to JBS.
JBS bought Greeley, Colorado-based Swift & Co., for US$225 million, and Smithfield Foods Inc.'s beef processing and cattle-feeding operations for US$565 million.
While the Smithfield purchase helped to boost net sales by 24 percent to BRL9.6 billion in the fourth quarter, average prices fell at JBS' US and Italian units. Profit before interest, tax and depreciation shrunk to 2.8 percent of sales from 6.8 percent in the third quarter.
CEO Joesley Mendonca Batista said the credit crunch has reduced international trade, resulting in significant inventory cuts in importing countries, and that it is difficult to estimate when volumes will flow again.
