SAO PAULO (Reuters) - Brazil's JBS SA,
the world's largest beef producer, posted a 97 percent slump in
second-quarter profit after two mergers, partly due to high
exchange rate volatility even as revenues rose.
Net profit totaled 3.7 million reais ($2.09 million) in the
second quarter compared with 125.9 million reais in the same
period in 2009, although the results are not readily comparable
with last year's due to recent mergers.
The result was also far lower than analyst expectations of
180 million reais in net profits in a Reuters poll.
JBS's figures now incorporate results from U.S.-based
Pilgrim's Pride in which it bought a 64 percent share in
September last year and local rival Bertin.
"Demand for working capital, as well as the impact from
exchange rate volatility during the quarter were the main
reasons for the retreat in profit," Chief Executive Joesley
Medonca Batista said in a statement.
The drop in profit came even as net revenues in the quarter
jumped 52.5 percent from the same period in 2009 to 14.1
The increase in revenues reflected the rise in sales
prices, favorable market conditions and a 22.2 percent increase
in the client base, the company said.
Earnings before interest, taxes, depreciation and
amortization, a measure of operational profitability and cash
generation known as EBITDA, jumped 163.3 percent in the quarter
from the same period in 2009 to 1 billion reais.
"We expect volumes and prices will continue to be strong in
the second half of the year, especially from the United States,
as international trade normalizes," Batista added.
(Reporting by Aluisio Alves; writing by Ana Nicolaci da Costa;
editing by Mohammad Zargham)