August 16, 2022
JBS Australia sees better financial results in Q2
JBS Australia recorded improved financial results in the second quarter ended June 30.
Shareholders were told JBS Australia posted net revenue of US$1.674 billion for the period, up 18% on the previous quarter and almost 32% on the second quarter last year. The Australian figures now cover operations in beef, lamb, pork (including the newly acquired Rivalea), small goods (the large Primo manufacturing business), and aquaculture (Huon).
Adjusted pre-tax earnings in Australia reached US$106 million, up 13.7% on the previous quarter and 87% higher than last year.
In a breakdown of cost of goods sold (COGS), the Australian operations saw raw material (livestock) accounting for 80.2% of overall production costs. Labour accounted for 10.4% (compare this with just 4.3% in Brazil, and 8.6% in US beef); and processing/packaging at 9.3% (versus 6.7% in Brazil and 7.6% in US beef).
Sales in the Australian domestic market, which represented 39% of JBS Australia total revenue in the period, were 12% higher than in 2021, driven by the additions of the Huon Aquaculture and Rivalea Pork businesses, bought last year, which have a strong focus on the domestic market.
Recovery in demand in the Australian retail and food service channels also contributed.
In JBS Australia's export markets, net revenue increased 49% compared to the second quarter last year, explained by the demand that remained strong in key markets like the United States, South Korea and Japan. Most of that occurred before the recent onset of severe drought across the United States, however, pushing more US beef into export markets.
Net revenue from the Australian beef business grew 34% compared to the second quarter of 2021, driven by both higher average prices and total volumes as the industry begins to recover from drought.
Australian cattle prices remained at "very high levels" for most of the reporting period (April-June), due to the long rainy season in the main cattle producing regions, but began to show early signs of easing towards the end of the quarter.
The Huon aquaculture business recorded a growth in net revenue of 25% compared to last year, as a result of growth of 24.6% in prices and 0.4% in volume. Net revenue in the Australian pork business grew 16% year-on-year, driven by growth in both volume and price.
The Primo prepared foods business unit recorded an increase of 4.5% in net revenue during the period as a result of price increases, with volumes relatively stable. Despite strong demand, the continued labour shortages impacted the growth in production volume.
- Beef Central