JBS net income drops 25 percent in second quarter

Brazilian meat and poultry producer JBS saw its net income drop 25 percent in the second quarter of fiscal year 2014. While net revenues were up, hedging costs cut into the company’s financial success.
JBS posted a net income of BRL254.3 million (US$112 million) in the second quarter of 2014, compared to the BRL338.5 million (US$149.18 million) recorded during the same quarter of 2013.
JBS’ net revenue for the quarter totaled BRL28.97 billion (US$12.77 million), an expansion of BRL7 billion (US$3.1 billion) or 32.1 percent higher than the third quarter of 2013. This increase is due to an improvement in revenues from nearly all business units and to the acquisition of Seara, which was consolidated into JBS Foods in the fourth quarter of 2013.
In the second quarter of 2014, approximately 68 percent of JBS global revenue was derived from domestic sales, with the remaining 32 percent coming from exports.
JBS USA Chicken revenues stable
JBS USA Chicken, also known as Pilgrim’s Pride Corporation, recorded net revenue of $2.19 billion, which is stable when compared to the second quarter of 2013. An increase in sales volume was partially offset by a decrease in sales price both in the U.S. and Mexico.
JBS Foods
JBS Foods saw its net revenue increase 11 percent. This increase was due to an improvement in sales volumes in both domestic and export markets, coupled with an increase in prices in the domestic markets.
JBS USA Pork
JBS USA Pork’s net revenue increased 18.4 percent when compared to the second quarter of 2014. This result is due to an increase of 24.3 percent in sales prices in the domestic market and an increase of 16.7 percent. Hog supplies remained tight, combined with a strong demand in the domestic market and in the main international consumer markets like Hong Kong, Japan and South Korea, contributed to a better pricing of pork in the U.S.
JBS Mercosul
The JBS Mercosul unit recorded a 15.8 percent increase in revenue, highlighting an increase of 21.9 percent in beef exports. Operations in Paraguay and Uruguay presented an increase in exports average price, which contributed to the increase in sales in addition to fixed costs dilution.
JBS USA Beef
JBS USA Beef saw its net revenues for the quarter rise 10.9 percent, due to an increase in sales volume in both domestic and export markets, coupled with an increase in prices in the domestic market.