(Adds details from financial statement)
SAO PAULO May 15 The world's largest meatpacker
JBS SA reported net income of 422 million reais
($135.7 million) in the first quarter, below a consensus
estimate of an 857 million reais net income, as it dealt with
the effects of a food safety scandal in Brazil.
In a statement on Monday, JBS said earnings before interest,
tax, depreciation and amortization (EBITDA), a gauge of
operating profitability, slumped 31 percent to 2.140 billion
The company said the effects of the investigation would not
be lasting, and did not make any provisions related to it.
Still, JBS posted a 14.3 percent drop in net revenue to 37.6
billion reais due to weakness at its Seara and JBS Mercosul
divisions. A stronger Brazilian currency also affected the
revenue line, the company said.
JBS said 26 percent of global sales came from export markets
in the first quarter.
The food safety scandal involved sanitation inspectors and
companies accused of conspiring to sell rancid products,
falsifying export documents or failing to inspect meat-packing
In April, JBS put workers on leave at 10 out of 36 cattle
slaughtering units in a bid to adjust capacity after the
investigation broke in March.
The scandal that rocked the domestic industry caused
importers to temporarily stop buying Brazilian meats.
"The company does not anticipate a relevant impact on the
operations, and therefore did not make any provisions," it said
in relation to the food safety probe, one of many circling the
company in the past few months.
In a new probe unveiled Friday, JBS was implicated in
alleged fraud related to loans it received from state
development bank BNDES.
JBS denies any wrongdoing.
In its financial statement, JBS said it has yet to gain
access to a court decision related to the latest probe, which
barred management to make significant changes at the company
during the investigation of the BNDES investments in JBS.
($1 = 3.1094 reais)
(Reporting by Ana Mano; Editing by Sandra Maler and Lisa