2018.03.2918:32:00UTC+00JBS: Foreign Exchange And JBS Brazil Weigh As Company Posts 4Q17 Loss

Brazilian food processor JBS reported a R$ 451.7 million (US$ 135.9 million) net loss in the fourth quarter of 2017, from a R$ 662.8 million profit in the same period a year earlier. The result missed by far the market forecast of a R$ 651 million net profit.

Fourth-quarter losses were driven in part by increased administrative expenses, which increased 43.9% on an annual basis, to R$ 2.246 billion.

Another factor that slowed the company's net result was JBS' financial loss, which doubled to R$ 2.075 billion. Half of this cost came from the exchange variation and the corresponding adjustment to fair value of derivatives (R$ 1.092 billion).

The company's net revenue increased 2.7% in the fourth quarter, to R$ 42.735 billion, while the EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 2.7% in adjusted terms to R$ 3.198 billion. Analysts expected lower net revenue, of R$ 41.705 billion, and an adjusted EBITDA of R$ 3.626 billion.

Seara's revenue dropped 4.5% in fourth-quarter over the same period of 2016, to R$ 4.474 billion, but recorded a 63.4% increase in EBITDA, to R$ 488.4 million. The unit EBITDA margin increased from 6.4% to 10.9%.

JBS Brasil recorded an 18.1% drop in revenue, to R$ 5.918 billion, and had a negative EBITDA in the fourth quarter, of R$ 308.6 million, driven by the fall in leather prices and a reduction in the number of cattle slaughterings compared to 2016.

The company's net debt fell from R$ 46.905 billion in the fourth quarter of 2016 to R$ 45.283 billion in the fourth quarter of 2017, and leverage, as measured by the net debt/EBITDA ratio, decreased from 4.16 times to 3.38 times in the last quarter of 2017.

On an annual comparison, JBS recorded a net income of R$ 534.2 million in 2017 - considering that the company adhered to the tax debts program (Pert), a high of 128.7%.