Brazil's JBS posts strong second quarter results, bolstered by Asian demand

SAO PAULO (Reuters) - JBS SA JBSS3.SA, the world's largest meatpacker, on Wednesday reported net income of 2.184 billion reais ($539 million) in the second quarter, beating analysts' expectations as an outbreak of African swine fever in Asia boosted exports.

FILE PHOTO: A worker spreads salted meat which will be dried and then packed at a plant of JBS S.A, the world's largest beef producer, in Santana de Parnaiba, Brazil December 19, 2017. REUTERS/Paulo Whitaker

According to a securities filing, the São Paulo-based company’s earnings before interest, tax, depreciation and amortization (EBITDA) totaled 5.099 billion reais, an all-time record and above analysts’ expectations of 4.535 billion reais.

JBS, which produces food in four continents, said net revenues grew by 12.5% in the quarter to 50.8 billion reais.

“The global protein market is expanding at an annual 2% as the world’s population is growing,” JBS said in its earnings statement.

“The outbreak of African swine fever in many countries has contributed to a rise in exports and represents an opportunity to grow our business,” the company said.

African swine fever, which has swept across China over the past year, is fatal to pigs but does not harm people.

At the Pilgrim's Pride PPC.O chicken division, results also improved on the back of a better supply-demand balance, JBS said.

In its U.S. pork division, the company said margins rose from the previous quarter despite higher raw materials costs.

In Brazil, JBS’ Seara processed foods division sales, which had struggled due to a recent downturn, rose by 24.3% to 5.081 billion, the company said.

In North America and in Australia, two key operating bases, the beef business stayed strong, driven by local demand and higher export volumes, the company said.

Reporting by Ana Mano; Editing by Richard Chang and Rosalba O’Brien