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SAO PAULO, March 22 (Reuters) – Brazilian meat packer JBS SA JBSS3.SAwhich operates several food processing facilities in the United States, said its North American operations will continue to drive performance.
Speaking on a conference call to discuss fourth quarter results, management said JBS will benefit from strong US domestic demand for food products and steady meat trade flows to Asian markets, particularly China. .
Shares of JBS rose 2.5% in early trading after reporting gains of $1.31 billion in the fourth quarter, beating analysts’ expectations.
In Brazil, where the company is headquartered, cost pressures will continue to weigh on the Seara division as meat processors scramble to buy corn used as food.
The shortage of maize during the inter-harvest period, which will last until the middle of the year, is aggravated by the war in Ukraine, which has caused a spike in grain prices worldwide, affecting operations in all geographic areas.
Seara, which processes pork and poultry, was unable to pass on rising costs to Brazilian consumers, management said, citing the weak Brazilian economy. In the United States, by contrast, consumers have the buying power to keep buying, executives said.
Citing USDA data for 2022, JBS officials said beef and pork production would fall from a year earlier in the United States, while poultry production would likely increase.
In the United States, where the company derives most of its revenue, the outlook for prices and margins remains positive. In Australia, herds are still recovering but the outlook is improving.
On Monday, JBS announced record sales last year thanks to the strength of its business in the United States, which is also supported by close commercial ties with China.
Regarding the acquisitions made by JBS in 2021, the company said that the acquired companies are showing better results than expected.
(Reporting by Ana Mano; Editing by Emelia Sithole-Matarise)
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