Brazilian company JBS, which is the world’s largest meat processor, racked up net losses of BR$911m (€200m) for the second quarter of its 2018 financial year.

The company blamed the losses on a sharp rise in financing costs from a weak Brazilian currency (Real), as well as a €25m charge, as a result of the trucker’s strike which crippled Brazil’s transport network for almost a month.

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Brazilian truckers went on strike in May due to soaring fuel prices. The strike severely disrupted Brazil’s agriculture sector and forced JBS to suspend all slaughtering at its beef, pork and chicken plants in Brazil for over a week as it couldn’t deliver product to its customers.

Overall, JBS recorded sales growth of 8% in the quarter to BR$45.2bn (€9.9bn). However, the group made an operating loss of BR$1.8bn (€390m). JBS remains highly leveraged with net debts in excess of BR$50bn (€11bn), or 3.2 times’ earnings.

JBS added that its business was also negatively affected by rising costs for grain, particularly maize (corn) and soya beans. In its US beef business, JBS posted a 76% increase in profits to €495m, as margins expanded from 6% to over 10%.

Beef demand

JBS said beef demand in the US is very strong, driven by the soaring US economy, while US beef exports are also running at double-digit growth. Profits fell by 42% in JBS’s US pork business, while profits were down 37% year on year in the group’s poultry business, Pilgrim’s Pride.