Brazilian multinational meat packing business JBS Foods has
unveiled better than expected results from the April to June quarter.
Its majority owner the Batista family admitted to
allegations of bribing 1,900 politicians over the last decade, through reaching
a plea bargaining deal with the Brazilian prosecutors in May. As a result, the
company has announced a series of governance changes and asset divestitures.
It also maintains that
the company could float on the US stock market next year. At the same time, the
business is fighting a lawsuit from a major shareholder seeking to remove
Batista family members from the company board.
'Always Do It Right'
In an investors conference call on the latest financials,
the board detailed changes to its corporate governance to avoid repeating past transgressions,
including a new Always Do It Right programme. The board has contracted the
White & Case international legal business to oversee its corporate governance.
The company is also seeking to raise R$6 billion through a
series of divestures – it has already sold the Mercosul beef production
businesses in Argentina, Paraguay and Uruguay; and says it is close to
agreement over the divestiture of its Moy Park poultry operation in Europe; the
Five Rivers beef production business in North America and a 20% stake in Vigor,
Brazil's sixth largest dairy company.
IPO delayed, not derailed
JBS said it is still working towards an NYSE flotation. Although
this "large and obvious step" had been delayed by recent events, the IPO had
not been derailed, and the board is confident of a listing in either the first or
second six months of 2018. Mr Batista told investors that JBS retained the full
support of its bankers.
The company returned an EBITA of R$3.76bn from April-June
2017 trading, 29.9% higher than the R$2.89bn from the same period of the
previous year. EBITA margin was 9%, up from 6.6% a year earlier.
Revenues were R$41.7bn in the latest three months, 4.6% down
on the R$43.67bn from a year ago, which directors attribute to a 9.2%
appreciation in the Brazilian Real.