JBS reported higher-than-expected earnings because strong demand for chicken and pork helped offset pressure on its U.S. beef business. The Brazilian company posted earnings before interest and taxes of R$10.8 billion (US$1.9 billion) in the fourth quarter, according to a statement released last week. This amount is more than double that of the previous year and 9.4% higher than the average estimate by analysts surveyed by Bloomberg.
JBS continued to benefit from robust demand for chicken, with its subsidiary Pilgrim’s Pride marking its best year to date. Demand for pork also helped boost the company’s results, as consumers turned to cheaper alternatives to beef after prices rose, especially in the United States.
“This result is even more significant considering the context in which it was achieved, with about a third of the business in a downward cycle,” CEO Gilberto Tomazoni said in an interview with Bloomberg News, commenting on the declining U.S. cattle herd and on improvements in operations at its Seara brand in Brazil.
JBS, which last week cleared a major hurdle to list its shares in New York, proposes to pay an additional R$4.4 billion in dividends to shareholders, pending Board approval. This would be on top of the same amount paid in October and another R$2.2 billion in January.
The company also benefited from strong beef demand in Brazil and Australia, which helped offset lower margins in the United States.
