JBS makes US$375 million from currency fluctuations

Proving the adage that one man's meat is another man's poison, Brazilian meat giant JBS S.A has said it gained more than US$375 million from its bets of the US dollar against the real, while rival Sadia lost US$343 million  for the same reason.

JBS's gained 300 million  reals (US$125 million ) from money it set aside from its intended purchase of National Beef and Smithfield Beef. The deals, if cleared by the US government, would allow JBS to own 30 percent of US beef processing capacity if approved.

JBS is the largest beef company in the world, with beef processing factories in Brazil, Australia, the US and Italy. The company's first quarter loss of US$4 million  widened to US$233 million  as the increase in grain prices exceeded the increase in beef prices.  Ironically, the same reason that caused its huge second quarter loss - currency fluctuations, was also the same reason that caused its gain this time round.

Part of the losses in the second quarter was attributed to the appreciation of the Brazilian real. This time, the real has slid nearly 20 percent against the dollar over the past two months.

JBS said it realized an increase in value of 422 million reals (US$175 million) on its assets from investments made in foreign companies, the company said.

The company estimated it will carry more than $500 million in cash after paying for the pending acquisitions.