JBS Posts Surprise Loss as Currency Hedges Go Against Meatpacker

JBS SA, the world’s largest meat producer, posted an unexpected fourth-quarter net loss after the Brazilian company took an expense related to currency hedges.

The net loss was 275.1 million reais ($73.5 million), compared with net income of 618.8 million reais a year earlier, the Sao Paulo-based company said in a statement late Wednesday. The average of nine analysts’ estimates compiled by Bloomberg was for a profit of 135.6 million reais. JBS said it had a 1.34 billion-reais loss on its hedging of foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

Revenue climbed 37 percent to a record 47.2 billion reais, boosted by increased volumes as well as currency depreciation. Still, sales missed the 48.7 billion-reais average estimate.

Brazil’s real lost almost one-third of its value last year, the most among major currencies tracked by Bloomberg. More than 80 percent of JBS’s sales are in dollars and include revenue from Pilgrim’s Pride Corp., the U.S. poultry company it controls.

Adjusted net income at Pilgrim’s, the second-biggest chicken processor in the U.S., missed analysts’ estimates after falling 62 percent in the period on weaker chicken prices, the unit reported on Feb 10.

To contact the reporter on this story: Gerson Freitas Jr. in Sao Paulo at gfreitasjr@bloomberg.net. To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Robin Saponar, Millie Munshi

By: Gerson Freitas Jr.

©2016 Bloomberg News