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2020 profit and sales up for JBS, expects meat growth in 2021

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JBS Global, the Brazil-based multinational meat processing business, has reported sharp increases in full year profitability and revenues, but a fall in net income from full year 2020. The company is confident of a post-pandemic recovery for beef, pork and poultrymeat in 2021 and 2022.

 

JBS is a major beef, pork and poultrymeat processor and protein foods manufacturer in Brazil and the US, with pork and poultry interests in Europe and Mexico.

 

The company has posted a full year 2020 EBITDA of R$29.56 billion on sales of R$270.2bn, up from the R$19.88bn and R$204.52bn in 2019. These are respective increases of 48.7% and 32%. But net income fell 24% to R$4.60bn from the prior year’s R$6.07bn.

 

JBS chief executive Gilberto Tomazoni describes the pandemic year as “one of the most challenging of our lives” with R$2.8bn invested in preventive measures and social responsibility initiatives to keep its workforce safe in the pandemic. He said the company’s recent strategic diversification in both its portfolio and geographic presence across 13 countries has proved to be the right one. The objective is for JBS have 10 global brands with sales over US$1 billion.

 

The company reports that beef production in Brazil decreased by 1% over 2020, according to USDA estimates, while its exports were up 14.1% in value terms, especially to China. Brazil’s poultry production grew by 1.4% and poultrymeat exports by 1.3%, despite the pandemic disruption and fall in demand from food service and catering businesses around the world.

 

Brazil’s beef and poultry to grow in 2021

 

Looking ahead, the USDA projects that Brazil’s beef production will grow by 3.7% in 2021 and its exports by 5.2%. The country’s poultry production is predicted to grow by 1.7% with a 4.3% increase for exports.

 

Turning to the US market, the USDA estimates stable beef production - up by 0.1% - for 2021 with a 1% fall in domestic consumption, but a 5.3% rise in beef exports, partially compensating for an expected fall in Australia’s beef exports as its cattle numbers reduce.

 

For chicken, the USDA predicts that US production will rise by 0.7% and domestic consumption by 0.4%, with exports stable.

 

US pork production is set to increase by 1%, with domestic consumption up by 0.8%, although exports are expected to fall by 1.9% in from last year’s high as China sought to replace domestic pigmeat supplies lost to African swine fever. Chinese pork production could grow by 14.5% in 2021 as it starts to recover from ASF, although it will remain significantly below pre-disease levels.

 

JBS cites United Nations data showing that a global recovery from the 2020 pandemic is expected with growth of 4.7% in 2021 and 3.4% in 2022, with infection rates declining as vaccination programmes are rolled out.

 

Investing in sustainability

 

Mr Tomazoni said the JBS Global business is committing itself to be more sustainable as the world population grows – producing more food using fewer resources. JBS aims to become Net Zero across its operations by 2040, achieving net zero greenhouse gas emissions by reducing direct and indirect emission intensities, while offsetting residual emissions.

 

JBS is in the final stages of testing and setting up a “ground-breaking” system using blockchain technology to reach other links in its supply chain. It will have a network of 13 Green Offices by the end of April to support its suppliers in complying with the company’s strict socioenvironmental criteria.

 

There will be further investment in the circular economy, creating companies within JBS to innovate and minimize the group’s environmental impact. For example, it has transformed its waste management into a profitable business that generates jobs and income.

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