Switzerland extends ban on meat from Brazilian processing plants
VIENNA, March 26 Switzerland has extended a ban on Brazilian meat to 21 processing plants from four as part of Europe-wide safety measures, Swiss authorities said on Sunday.
(Adds comments from executive and analyst, details of earnings, share performance)
By Brad Haynes and Paula Laier
SAO PAULO, March 14 Brazilian meatpacking giant JBS SA expects profit margins to improve over the course of this year, Chief Executive Wesley Batista said on Tuesday, as lower cattle and feed costs and healthier markets ease the pressures that hurt 2016 results.
JBS shares rose 2 percent in Sao Paulo despite lower-than-expected earnings reported late on Monday, as investors cheered the strong performance of its U.S. beef business and the outlook for stronger global demand this year.
"We expect... a gradual improvement each quarter in international prices, which clearly helps to recover margins, along with lower input costs," Batista told analysts on a call.
Earnings before interest, taxes, depreciation and amortization slipped to 6.6 percent of revenue in 2016, from 8.2 percent in 2015 as a spike in Brazilian grain prices and a tight U.S. cattle market eroded profitability.
By the fourth quarter, however, the so-called EBITDA margin recovered to 7.5 percent, just 0.1 percentage point below a year ago. The margin in the JBS USA beef business swung to 7.3 percent from negative 0.5 percent a year earlier.
Bradesco BBI analyst Gabriel Lima told clients in a note on Monday that exports to Asia helped boost the U.S.-based beef division, whose strong performance should lift the group's EBITDA by 30 percent this year.
Excluding the cost of writing off a discontinued brand in South America, Lima said fourth-quarter EBITDA would have risen about 10 percent, in line with his expectations.
Batista said U.S. beef exports have remained healthy in the first three months of 2017, up about 25 percent from a year ago.
He said the $230 million acquisition of ham and bacon producer Plumrose USA, announced along with earnings on Monday, should generate annual cost savings between $25 million and $30 million.
Batista said JBS had no major acquisitions on its radar, that but there could be more opportunities like the Plumrose deal.
The plan to list its global business units separately in a U.S. IPO of subsidiary JBS Foods International remains on schedule, Batista added. (Reporting by Paula Laier and Brad Haynes; Editing by Chizu Nomiyama and Dan Grebler)
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Source text in Chinese: http://bit.ly/2mDYR5h (Reporting by Hong Kong newsroom)