Brazil's JBS reports surging quarterly profit; beats estimates

SAO PAULO (Reuters) - Brazil-based meat giant JBS SA JBSS3.SA on Wednesday reported a near nine-times increase in third-quarter net profit, beating market expectations, driven by strong demand at home as well as from the United States and China.

FILE PHOTO: The logo of Brazilian meatpacker JBS SA is seen in the city of Jundiai, Brazil June 1, 2017. REUTERS/Paulo Whitaker

July-September profit reached 3.133 billion reais ($581.2 million) versus 357 million reais in the same period a year prior. That compared with the 2.870 billion reais average of three analysts estimates compiled by Refinitiv.

Net revenue rose more than 34% to 70 billion reais, with all business units recording growth in reais terms.

JBS said earnings were bolstered by strong performance in its U.S. beef, pork and chicken businesses. Its Seara processed foods division in Brazil, which also exports pork and poultry products, also performed well, boosted by government cash aid for lower-income households during the COVID-19 pandemic.

“Our industry’s long-term fundamentals remain solid,” JBS said in a statement. “We may face occasional mismatches in supply and demand by region in the short term, which does not change the trend.”

Pork production returned to pre-pandemic levels in the United States, and JBS said strong demand there and on export markets meant it could raise prices above year-earlier levels.

From the United States, JBS said it was able to grow pork exports to China, with Mexico and Canada two other main export destinations.

Overall, almost a third of JBS’ meat exports went to China.

In Europe, JBS said it continued to see improvement in its poultry business, with consumer demand gradually recovering from the impact of the pandemic.

JBS also said its vegetal line of products had been a hit in Brazil, with its “Incrível” brand reaching 60% of market share.

($1 = 5.3910 reais)

Reporting by Ana Mano; Editing by Tom Hogue and Christopher Cushing