JBS (JBS) Q2 2024 earnings summary

Executive summary

• Net revenue reached $19.3 billion in Q2 2024, up 6.8% year-over-year, with adjusted EBITDA of $1.9 billion and net profit of $329 million, reversing a loss in 2Q23.

• Adjusted EBITDA margin rose to 9.8%, up 4.8 percentage points year-over-year, and gross margin improved to 15.4% from 11.1% in 2Q23.

• Free cash flow was $1.1 billion, a 315% increase year-over-year, reversing Q1 cash consumption and generating $431 million year-to-date.

• Dividend distribution of $0.037 per share and interim dividend of $808 million ($0.30 per share) announced.

• Diversification strategy drove results, with 75% of EBITDA from poultry and pork, especially Pilgrim's, Seara, and JBS USA Pork.

Financial highlights

• Net debt reduced to $14.8 billion, down $1.9 billion year-over-year, with leverage dropping to 2.77x from 3.66x sequentially and 4.21x year-over-year.

• Capital expenditures were $346 million, 63% allocated to maintenance, and 37% to expansion.

• Operating cash flow for the quarter was $1.8 billion, up from $1.1 billion in 2Q23.

• Export revenue grew 2.4% year-over-year to $4.9 billion, with Asia accounting for 48% of exports.

• Cash and equivalents stood at $3.9 billion, with $3.3 billion in undrawn credit lines and total liquidity of $7.2 billion.

Outlook and guidance

• Leverage expected to continue declining, potentially below 2.5x in Q3 and close to 2x by year-end.

• Management expects continued benefits from diversification, operational improvements, and investments in innovation and capacity expansion.

• Domestic demand in Brazil is expected to remain strong into 2025, with continued investment in value-added and innovative products.

• Grain prices are expected to remain stable, supporting margins if supply-demand balance holds.

• Strategic emphasis on value-added and branded products to improve growth and margin profile.