(Adds executives’ remarks)
By Ana Mano
SAO PAULO, March 25 (Reuters) - JBS SA, the world’s largest meat-packer, on Wednesday reported its quarterly net profit soared 332% over the prior-year period, thanks to a surge in sales to China, which increased food imports dramatically after an outbreak of African swine fever.
The fourth-quarter net profit rose to 2.43 billion reais ($482.5 million), JBS said in an earnings statement.
The result beat analysts’ forecasts for net income of 2.19 billion reais.
JBS executives told Reuters that the company is in a good place to navigate market turbulence amid the coronavirus pandemic.
JBS has been able to reduce debt over the past year and has no current need to raise additional capital, Chief Financial Officer Guilherme Cavalcanti said in a phone interview. The company expects to save $100 million in interest payments in 2020, he said.
“Happily we stretched debt maturities at the right moment,” he said.
Chief Executive Officer Gilberto Tomazoni said demand from China will likely remain strong as supply disruptions caused by African swine fever persist.
Aside from that, Chinese cities are easing lockdowns related to the coronavirus pandemic, which should be positive for demand.
Tomazoni said JBS is ready to weather the storm stemming from the health crisis, given the company’s diversified production base and seniority of management.
“Based on the size of the ship, it will rock more or less with the waves,” Tomazoni said in the interview.
Plans to list JBS shares in the United States remain a priority, though a timeline is uncertain given market jitters related to coronavirus, the CEO said.
For the fourth quarter, earnings before interest, taxes, depreciation and amortization, a measure of operating income, were 5.67 billion reais in the quarter, slightly higher than Refinitiv analysts’ estimates of 5.53 billion reais.
According to the earnings statement, net revenue grew by almost 21% to 57 billion reais.
At its Brazil beef division, JBS said sales to China almost doubled, with volumes rising 61% while average prices grew by 23%.
In processed foods division Seara, net sales were 5.7 billion reais in the fourth quarter, up 23.9% from the previous year thanks to heated demand in domestic and foreign markets.
In 2019, JBS pork export volumes to China out of the United States rose 10% from the previous year, driven by demand from China chiefly in the second half.
U.S.-based Pilgrim’s Pride, which sells poultry products, posted net sales almost 25% higher in the fourth quarter, totaling 12.6 billion reais, JBS said.
$1 = 5.0358 reais Reporting by Ana Mano and Alberto Alerigi; Editing by Sandra Maler and Leslie Adler