JBS sees profitability improve in all markets

JBS has achieved significantly better results in the last three quarters, as evidenced by the report of the meat giant on the third quarter of 2024. Good performance in the Brazilian and Australian beef markets compensated for weak performance in the United States. The tightness in the beef market is favorable for the company, but the performance in the pork and poultry markets is even stronger.

JBS has significantly improved its revenue in the first three quarters of the year compared to the same period last year. During the first nine months of the year, revenue increased by 7.2% from $53.4 billion to $57.32 billion. Ebitda increased by 120% in the same period from $2.43 million to $5.35 million.

Less good performance in the beef market
Over the first three quarters, performance in the American beef market is clearly less good. Throughout 2023, Ebitda of the Brazilian beef division decreased by roughly 36% from $213 million to $136 million. Compared to the performance of other companies, this result is good. For example, Tyson reported a loss of $381 million in the fiscal year 2024.

The overall performance in the global market is clearly stronger throughout the year. Brazil and Australia benefit from the tightness in the American market, allowing them to more than compensate for the weak performance of the American branch.

Ebitda in Brazil increased by over 150% in the first three months to $733 million. In the Australian market, Ebitda also increased by roughly 90% to $524 million. It is expected that performance will decrease in the fourth quarter. In the fourth quarter, JBS typically observes a decrease in Australian slaughter rates. Due to the rainy season, the supply of livestock is lower. When you add up the results of the beef divisions, JBS continues to benefit from the tightness in the global market. Total Ebitda increased by over 78% from $782 million to $1.39 billion.

Strong performance in the United States
A clear positive trend can be seen in the American pork market. The department's Ebitda increased by 141% to $800 million. Due to a more favorable price position, more pork was consumed. In addition, JBS's exports increased by 9% compared to the previous year. Particularly, exports to Mexico, South Korea, and Colombia increased significantly.

The performance of the American poultry market was also above expectations. This is evident from the results of subsidiary Pilgrim's, which specializes in the sale of processed poultry. The subsidiary reported a margin of 16.9%. Strong demand in the United States, Europe, and Mexico led to this result. The company also attributes its growth to the increasing popularity of ready-to-eat chicken products.

Brazilian poultry and pork markets dominate
The Brazilian poultry and pork markets also perform well above expectations. JBS serves these two markets under the brand name Seara. Particularly strong performance in the global market helped. Brazilian exports of both chicken and pork increased significantly more than expected. In the case of chicken, tightness in the global market contributes to the strong figures. In the field of pork, Brazil managed to gain a strong competitive position with exceptionally low prices. JBS reaped the benefits of both trends. The Ebitda of this department increased by a whopping 375% to $1.09 billion.

Together, the poultry and pork divisions clearly drove the strongest growth. The combined Ebitda of the companies increased by a whopping 198% from $1.32 billion to $3.95 billion. This performance is significantly better than the Ebitda of $1.39 billion in the beef market.

Matthijs Bremer

Matthijs Bremer is a market specialist in pork, beef, and poultry meat at DCA Market Intelligence. He also monitors the protein transition, keeping an eye on developments in cultured meat and meat substitutes.

m.bremer@farmerbusiness.com