(Adds detail about China)
SAO PAULO, Nov 10 (Reuters) - The world’s largest meat company JBS SA posted third-quarter net income that exceeded analysts’ expectations on the strength of its United States meat business, exports to China and higher domestic food sales.
According to a financial statement on Wednesday, JBS profited 7.58 billion reais ($1.8 billion) as net revenue rose 32% to 92.62 billion reais in the quarter.
The company showed double-digit margins in its U.S.-based beef, poultry and pork units, and also at its Seara unit in Brazil.
At Seara, which processes pork and poultry, net revenue soared 38% as sales volumes rose and the company increased the average price of products sold by almost 15%, allowing it to partly offset higher grain prices weighing on meat packers globally.
In the United States, cattle availability remained stable, but cattle prices rose by up to 22% compared to the same quarter last year, pressuring costs on its biggest market by sales.
“Global demand for beef is also very strong, especially in Asia, which accounts for more than 75% of total U.S. beef exports,” JBS said.
In Brazil, JBS said a Chinese ban on beef imports from the country affected slaughtering. However, as the company operates in many markets, it can use the United States or other origins to sell meat to China.
“China continues increasing its purchases month after month, and has already become the third-largest destination for American exports of beef,” JBS said.
At the same time demand for beef continues to grow in North American markets and COVID-19 vaccinations accelerated the reopening of restaurants.
Margins of JBS’s beef business were the highest among all divisions, at 21.8% last quarter.
JBS said its accumulated net profit in 2021, at 14 billion reais, will allow it to pay a minimum dividend of around 3.5 billion reais in 2022. (Reporting by Ana Mano and Nayara Figueiredo; editing by Grant McCool and Stephen Coates)
Our Standards: The Thomson Reuters Trust Principles.