JBS expects Pilgrim's to report profit for 2012
Rising demand, decline in costs should restore gains
Brazil meatpacker JBS SA said that it expects its U.S. poultry unit Pilgrim's Corp. to report a profit for 2012, after the company reported an $85.4 million loss for the fourth quarter of 2011, according to reports. Pilgrim's has struggled with high feed costs and excess supply in North America, but rising demand and a decline in costs are likely to help improve margins, said Jeremiah O'Callaghan, head of investor relations for JBS.
The meatpacker raised its stake in Pilgrim's to 75 percent in March. "We are witnessing an improvement in the United States," said O'Callaghan. "There was a widespread cut in poultry production in that market but demand has remained resilient." A weak U.S. dollar and solid demand in countries like Mexico and Venezuela, which have increased their purchases of JBS products so far in 2012, will also help profitability, he said.