JBS S.A. said last Monday the company, having finalized recent mergers and acquisitions, is focused on improving its financials in order to achieve an investment-grade credit rating in this year.
Joesley Batista, the company's president and CEO, told investors during an analysts' call that one of the main goals is to reduce its net debt-to-EBIDTA ratio to below 2x from the current ratio of 3.1x, and he said JBS hopes to reach that goal sometime during 2010.
"We will be focused on changing the risk perception," Batista said.
Analysts inferred that JBS would therefore cease acquisitions this year, but Batista did not rule them out. He also did not specify when JBS would launch the initial public offering for JBS USA, which has been shelved amid soft demand in that market.
Reductions in expenses and debt service costs helped JBS post net profit of $71.6 million in the fourth quarter of fiscal 2009, reversing a loss of $29.9 million in the same period of fiscal 2008 primarily caused by amortizations from acquisitions.
Net revenue fell 23 percent to $7.4 billion as the Brazilian real gained against the dollar, but EBITDA jumped nearly 50 percent to $223.3 million in the fourth quarter of 2009 on operational improvements in Brazil and the United States. Consolidated EBITDA margins nearly doubled to 5.4 percent.
Full-year profit was $72.63 million, up from $14.54 million in 2008. Full-year net revenue rose 13 percent to $19.3 billion.
Pilgrim's Pride
JBS is currently integrating the acquisition of U.S. poultry producer Pilgrim's Pride Corp. and the merger of Brazilian beef competitor Bertin S.A.
Wesley Batista, CEO of JBS USA, confirmed that, as previously mentioned, Pilgrim's Pride expects to reopen one plant by year's end in order to meet increasing export demand. He did not specify which plant that might be.
"We believe that the emerging markets are growing fast and in high numbers," he said. "We believe these markets will increase demand for protein. We believe chicken will benefit from this increase in demand."
Source: newsroom - meattradenewsdaily.co.uk
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