May 16, 2014

Brazil's JBS SA has reported a drop in net profit during the first quarter of 2014, due to an increase of its hedging costs during the period, according to a Wall Street Journal report.

The company posted a net profit of US$32 million, down from US$103 million in the year-earlier period.

JBS' debt service costs totaled US$392 million in the first quarter, up from US$35.3 million. The debt service costs were affected by the costs of hedge operations and exchange variations, the company said.

JBS's revenue increased 35.3% in the period to US$12 billion. Ebitda, or earnings before interest, taxes, depreciation and amortisation, almost doubled over-year to US$789 million in the first-quarter.

JBS's net debt ended the quarter at US$11 billion, down from US$11 billion at the end of 2013. The company didn't unveil comparative figures for the year-earlier period.

The company also released the results of its new processed foods and poultry division, JBS Foods, separately as the company is planning to sell shares of this division in the next months, according to three people familiar with the deal. The operation is expected to amount around US$1.35 billion.

JBS Foods posted net revenue of US$1.25 billion in the first quarter and Ebitda of US$171 million.