For the 2022 financial year, global chief executive officer Gilberto Tomazoni reports that the group JBS S.A. is in a strong financial position.
This assessment is supported by a strong balance sheet, a healthy cash position and designation of the group to Full Investment Grade Status by the three leading ratings agencies.
Results for the fourth quarter of 2022 just reported by JBS reveal the group’s overall net revenue down 4.5% year-on-year at 93 billion real (BRL; US$17.66 billion). At BRL4.6 billion, profitability (expressed as adjusted Earnings Before Interest, Taxes, Depreciation and Amortization; EBITDA) was 65% lower than in the same period of the same year. Adjusted EBITDA margin was down 8.6 percentage points at 4.9%.
For the full 2022 year, JBS reported a 6.9% increase in net revenue at BRL375 billion. This led to a 24.3% year-on-year reduction in Adjusted EBITDA at BRL34.6 billion. At 9.2%, Adjusted EBITDA margin was 3.8 percentage points below the previous year’s level.
In 2022, consolidated export revenue for the group was US$19.1 billion. This was an increase of 13% over the previous year. Asia was the destination for 51% of all JBS S.A, exports, with China alone accounting for more than 26%.
Mixed fortunes for JBS’s global businesses in 2022
Of the group’s six main businesses, the largest in terms of net revenue is JBS Beef-North America. For the 2022 fiscal year, revenue generated by this division was down by 1.4% at BRL114.0 billion. While EBITDA was 56% lower than in 2021, EBITDA margin fell by more than 11 percentage points year-on-year to 9.4%.
In contrast, Pilgrim’s Pride achieved a 13% increase in net revenue to BRL90.1 billion, raising EBITDA by 17.4%. EBTIDA margin was slightly higher at 11.9%.
At BRL58.9 billion, net revenue generated by JBS Brasil was up 9.6% in 2022. EBITDA margin dipped slightly to 10.7% on a 3.8% rise in EBITDA for this business.
Over the last 12 months, net revenue from Seara was reported at BRL43.0 billion, a year-on-year increase of 17.6%. EBITDA was up by 19.3%, while the EBITDA margin of 10.7% was hardly changed from 2021.
A 2.5% increase in net revenue was achieved by JBS USA Pork to BRL42.1 billion in the 2022 fiscal year. EBITDA was 7.5% lower, while EBITDA margin was down one percentage point at 9.3%.
For the last financial year, positive developments in all three of the key metrics were reported for JBS Australia. Net revenue was 13.1% higher at BRL32.6 billion. Furthermore, an improvement of more than 29% was achieved in EBITDA, and EBITDA margin was 7.0%.
Recent business developments
During the conference call on the Group’s results, CEO Tomazoni stressed the importance of sound financial management. He referred to the ongoing global economic challenges, and the normalization of margins in the U.S. beef market. However, along with the company’s abilities to anticipate business cycles, he said that JBS faces the 2023 financial year in a satisfactory position. The Group’s cash position is “comfortable,” he said, debt has been stabilized, and it faces no short-term debt maturities.
As a result, the group is in a good position to respond to future market opportunities, Tomazoni said, particularly in the medium- and long-term.
Among the varied investments made by JBS during 2022 were Grupo King’s (producer of Italian charcuterie), Rivalea (Australian pig meat company), BioTech Foods (a global leader in cultivated protein), and TriOak Foods (a pork producer and grain trader in the U.S. Midwest).
The group’s positive and generally very stable trading results over the past 15 years is attributed by Tomazoni to its geographical and product diversification.
Worldwide, JBS’s workforce currently numbers around 260,000, 143,800 of whoms are based in Brazil.
Looking ahead to 2023
With a favorable cash position, JBS is in a position to take advantage of acquisition opportunities, according to the CEO.
The group continues to adhere to its multi-protein strategy, while looking for possible candidates to diversify its portfolio, as well as to invest in added value and brands.
When market conditions are favorable, JBS S.A. will pursue its goal to list in the U.S., but it has no firm target date currently.
More on JBS S.A.
Based in Brazil, JBS S.A. is by far the largest broiler company in the world. This is according to a review of the global leading chicken meat businesses in the current issues of Poultry International. Across its operations — Seara in Brazil, Pilgrim’s Pride in the U.S. and Mexico, and Moy Park in the United Kingdom — the group slaughters more than 4.4 billion chickens per year.
One month ago, JBS Australia reopened a plant processing lamb, mutton and goat meat in the state of Victoria in response to growing demand.
To support progress on Environment, Social, and Governance standards, the JBS leadership team appointed its first global chief sustainability in September of last year.
