JBS has posted reduced profits in 2022 compared with the record results of the previous year despite revenue increasing by 6.9% to BRL375bn (€67bn). Earnings before interest, taxation, depreciation and amortisation (EBITDA) were down 24.3% to BRL34.6bn (€6.2bn), with net income down 24.5% to BRL15.5bn (€2.8bn).

The North American beef division is the biggest part of the JBS group, which is headquartered in Brazil and is the world’s largest beef and poultry processor through its subsidiary Pilgrim’s Pride.

Pilgrim’s Pride owns Moy Park poultry and acquired the Kerry Meat and Meals Division in 2021.

It was a return to more normal profit margins on beef in the US that had the biggest effect on JBS in 2022. While revenue was only down a marginal 1.4% to BRL114bn (€20.4bn), this was a 56% drop in EBITDA to BRL10.7bn (€1.9m) and an 11.6% drop in EBITDA margin to a still very healthy 9.4% following what had been a truly exceptional year in 2021. It was a particularly difficult fourth quarter for JBS in North America, with revenue down 12.3% compared with the same period in 2021 to BRL2837bn (€5.1bn) and EBITDA down 85.5% to BRL1bn (€178.6m), though this is a still respectable 3.6% EBITDA margin.

The company referenced the “current challenging market conditions” with “high inflation weakening consumption causing an imbalance between supply and demand”. Production costs are also a problem for JBS as US cattle prices have been consistently above €5/kg for carcases, with a 60% kill-out for much of 2022.