May 16, 2008

JBS loses US$4 million in Q1

Beef giant JBS S.A. has reported a loss of US$4 million in the first quarter of this year, compared with net earnings of about US$6.4 million in the same period on-year.

JBS explained that the high corn and soybean prices raise the cost of cattle in the US. The company derives about 50 percent of its sales from its US assets, including JBS-Swift & Co.

According to CEO Joesley Batista, however, the company will likely post a profit in the second quarter as US margins improve.

JBS acquired Swift last year, helping it boost its net sales to US$3.5 billion, from US$650 million during the quarter ended March 30.

Aside from higher costs in the US, JBS attributed its losses on the EU's ban on Brazilian beef imports and Argentina's restrictions on exports. The company operates five beef facilities in Argentina.