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By Roberto Samora
SAO PAULO, Nov 13 (Reuters) - Brazilian meats company JBS SA expects net revenues to rise 22 percent to $50 billion in 2014, CEO Wesley Batista said on Thursday, eyeing an improving demand scenario in its main foreign markets and a strengthening dollar.
Batista added that large soy and corn harvests in the United States and South America would keep feed costs down and that beef prices would likely stay at current near-record levels.
The recent strengthening of the dollar against many of the world’s currencies, particularly Brazil’s real, is positive for JBS as 80 percent of the company’s revenues are in dollars, Batista said at a presentation in quarterly earnings.
On Wednesday night, the world’s largest beef exporter reported a five-fold increase in net profit in the third quarter to 1.1 billion reais ($428 million).
“We are beginning to reap the fruits of internationalization, of becoming a global company,” he said. If the 30-billion reais in revenue earned in the quarter was calculated at the current exchange rate JBS would have taken in up to 37 billion reais, he said.
Batista, son of JBS founder Jose Batista, said the company’s exports of animal protein products from its Australian unit to China were growing and are expected to keep doing so.
JBS has also increased pork exports to Russia, which placed an embargo on food products from many western nations in August in response to the Ukraine crisis.
Questioned if a stronger dollar could hurt JBS beef exports from the United States, Batista said the company could focus more on the domestic U.S. market, where it is the second-largest food company by revenue after Tyson Foods.
JBS grew from a small family-run business in Brazil into a global foods giant through an aggressive takeover strategy it has resumed recently.
In October of 2013, JBS acquired pork and poultry unit Seara from its rival Marfrig Alimentos SA, and now calls the unit JBS Foods. Cost savings from the acquisition totaled 1.2 billion reais, Batista said. He said JBS’s net debt to EBITDA would fall to 2 by the end of the year after spiking after the acquisition.
JBS has repeatedly delayed an initial public offering for JBS Foods but Batista said it may happen in early 2015. (U.S. $1 = 2.6 Brazilian reais) (Reporting by Roberto Samora and Reese Ewing; writing by Caroline Stauffer, editing by W Simon and David Gregorio)