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.
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.
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.
By Jamie Day