Key Takeaways:
JBS swung to a $96.2 million Q2 net loss as cattle costs and $171.6 million of debt charges erased a 13.8 percent revenue gain.
The 9-cent loss missed the $0.32 consensus estimate, while revenue of $23.9 billion topped the $23.1 billion analysts projected, Zacks data show.
Revenue rose to $23.9 billion from $21.0 billion a year earlier, but gross profit fell to $2.59 billion from $2.83 billion as the cost of cattle reached record levels. Net finance expense widened to $695.6 million from $376.4 million, including $171.6 million tied to the early extinguishment of Senior Notes and agribusiness receivables certificates. Adjusted EBITDA fell to $1.43 billion from $1.75 billion.
For the first half, net revenue climbed 12.3 percent to $45.5 billion, while net income collapsed 87.4 percent to $145.4 million. Adjusted EBITDA dropped 21.9 percent to $2.56 billion, with Beef North America posting a $345 million loss on the measure. Pilgrim's Pride Adjusted EBITDA fell 35.5 percent to $952.6 million on higher live-operation costs, while Australia declined 19.3 percent to $363.5 million.
Revenue growth was led by the Brazil segment, up 24 percent to $8.37 billion, and Australia, up 31.1 percent to $4.71 billion. Beef North America revenue rose 12.9 percent to $14.94 billion on a 21 percent jump in average sales prices, but volumes fell 6.7 percent as cattle costs hit records. The company said escalating Middle East tensions raised costs for packaging, transportation and freight during the quarter, with higher maritime shipping and alternative-route expenses.
Cash and cash equivalents fell to $3.47 billion from $4.57 billion at year-end after the board paid a $1.00 per share dividend totaling $1.07 billion, more than seven times six-month net income. Total loans and financing reached $22.65 billion, with $18.93 billion of non-current debt maturing after 2031.
The results come as JBS prepares for a leadership transition, with Wesley Batista Filho set to become global chief executive in January 2027, succeeding Gilberto Tomazoni. The company also agreed in August to form a $2.5 billion joint venture with Indonesia's sovereign wealth fund Danantara to invest in Asia-Pacific protein, with $800 million due at completion.
The dividend payout exceeding six-month earnings shows management's confidence in cash generation, but it drained liquidity as interest costs mount. Investors will watch the completion of the Danantara joint venture and the CEO handover in January for the next catalysts.
This article is for informational purposes only and does not constitute investment advice.
