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JBS SA Beats Earnings Estimates, Looks to Expand

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JBS SA Beats Earnings Estimates, Looks to Expand

The world’s largest meat supplier, JBS SA, recorded fourth-quarter profits that spiked 65% from a year earlier. Sales were boosted by strong food sales in China and the U.S. and a sharp devaluation of Brazil’s currency, reported U.S. News & World Report (March 25).

Here are ways JBS is expanding as the industry recovers from COVID-19 disruptions:

MEAT SUPPLIERS HAVE HOPE

In the U.S., where the company makes most of its revenue, the beef industry remained solid, helping overall performance even as JBS grappled with production cuts in the first half of the year related to the COVID-19 pandemic.

Major meat suppliers seem to have optimism as the U.S. sees light near the end of the tunnel amid the pandemic, as major plant plans are in the works in states like Iowa where the state’s largest processing plant is about to get even bigger.

Iowa Premium will undertake a $100 million expansion of its Tama plant, according to parent company, National Beef Packing Co., as noted by Des Moines Register (March 17). Scheduled to be completed by the end of 2022, the expansion will add a second production line to the factory and lead to several hundred additional jobs.

M&A ACTIVITY TO COME           

Meanwhile, the record cash flow from JBS spurred the company to propose record high dividend payouts and expand with more acquisitions, reported Bloomberg (March 24).

“We still have room to grow more through acquisitions and organically,” CFO Guilherme Cavalcanti said in the report. “Our focus remains on expanding in processed foods in the regions where we already have production.”

See Also

JBS already spent about $356 million on acquisitions last year, including the purchase of margarine assets from Bunge Ltd in Brazil. For more about M&A throughout the industry, check out The Food Institute’s recent webinar, Food Industry M&A: What to Expect in 2021 & Beyond, by clicking here.

ESG GOALS

JBS has committed to reach net zero greenhouse gas emissions by 2040, reported The Grocer (March 25). It also pledged to eliminate all deforestation from its global supply chain by 2035.

The company will first look to eliminate all illegal Amazon deforestation by 2025, and in other Brazilian biomes by 2030. In total, JBS will invest more than $1 billion over the next decade to reach its targets, focusing on emission reduction projects.

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