JBS records surge in Q1 sales on cost cuts

Brazil's JBS SA, the world's largest beef producer, posted a first-quarter profit on Friday (May 14), reversing a year-earlier loss, on a surge in sales and cost-cutting at its US unit.

Net income totalled BRL99.4 million (US$55.2 million), compared with a net loss of BRL322.7 million (US$179.22 million) a year earlier, JBS said. Sales jumped 35.4% year-on-year to BRL12.55 billion (US$6.97 million). Sales more than doubled at its Mercosur unit, which sells beef in Brazil, Argentina, Uruguay and Paraguay.

Earnings before interest, taxes, depreciation and amortisation, a measure of operational profitability and cash generation known as EBITDA, more than doubled to BRL862 million as JBS slashed freight costs, packaging and other expenses at its US beef business.

Earlier, the company raised BRL1.84 billion (US$1.03 billion) through the sale of new voting shares three months after delaying the listing of its US-based unit.

JBS sold 230 million shares, including a possible supplementary offering, for BRL8 (US$4.44) each, according to a regulatory filing. That is 1.7% below the BRL8.14 (US$4.52) close in Sao Paulo. JBS said in April that it would sell as many as 270 million voting shares.

The company, which resumed purchases late last year after the global credit crunch reduced the value of assets, has acquired Pilgrim's Pride Corp., Brazil's Bertin SA and Australian lamb producer Tatiara Meat Co.