Sao Paulo | Reuters — Brazilian meatpacker JBS, which operates multiple food processing facilities in the U.S. and one of Canada’s largest beef packing plants, said its North American operations will continue to drive performance.
Speaking at a conference call to discuss fourth-quarter results, management said JBS will benefit from strong U.S. domestic demand for food products and steady meat trade flows to Asian markets, especially China.
JBS overall reported net income of 20.5 billion reais (C$5.24 billion) in 2021 on revenue of 350.7 billion reais, up 345 per cent from its 2020 net.
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In Brazil, where the company is headquartered, cost pressure will continue to weigh on the Seara division as meat processors scramble to buy corn used as feed.
The scarcity during the inter-harvest period for corn, which will last through the middle of the year, is compounded by the war in Ukraine, which has caused grain prices to spike globally, affecting operations across all geographies.
Seara, which processes pork and poultry, has been unable to pass on higher costs onto consumers in Brazil, management said citing the weakness of Brazil’s economy. In the United States on the other hand, consumers have the purchasing power to continue buying, executives said.
Citing USDA data for 2022, JBS managers said beef and pork production will fall from the previous year in the United States, while poultry output will likely rise.
In the United States, where the company derives most of its revenue, the outlook for prices and margins remains positive. In Australia, herds are still recovering but the outlook is improving.
On Monday, JBS reported record sales last year on the back of the strength of its U.S. business, which is also buoyed by strong trade ties with China.
In its JBS USA beef unit, which includes its Canadian operations, the company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US$1.34 billion on net revenue of US$7.5 billion in its fourth quarter, and full-year 2021 EBITDA of US$4.89 billion, up 105 per cent on the year, on US$27.18 billion in revenue.
Regarding acquisitions JBS made in 2021, the company said companies acquired are performing better than expected.
— Reporting for Reuters by Ana Mano; includes files from Glacier FarmMedia Network staff.
