JBS wants to “enrich strategies” with Wesley and Joesley Batista on the board

The management of JBS (JBSS3) yesterday nominated the names of brothers Wesley and Joesley Batista to occupy the two new seats created on the company’s board of directors. The call occurred on the same day that the company reported its worst results since listing on the stock exchange in 2007.

Sons of the founder, José Batista Sobrinho, the entrepreneurs were largely responsible for the growth and internationalization process in the first decade post-IPO. However, they moved away from everyday life in the wake of Joesley’s accusation, as part of Operation Lava Jato, which shook President Michel Temer’s government.

“The presence [de Wesley e Joesley Batista] on the board will enrich strategic discussions on the board”, said JBS CEO, Gilberto Tomazoni, during a conference call with analysts this Wednesday morning

For the entirety of last year, JBS recorded a net loss of just over R$1 billion, compared to a profit of R$15.4 billion in 2022. It was the first time in 12 years that the company ended a year in the red. The last loss was in 2011, when the result was negative at R$75.7 million.

For the second year in a row, the company saw its earnings before interest, taxes, depreciation and amortization (EBITDA) decline. In 2023, Ebitda fell by half (50.4%), to R$17.14 billion, the worst level in the last five years. In 2022, the indicator had already fallen 24.3% compared to the previous year.

The big thorn in JBS’s side in 2023 was the American cattle operation. The vertical recorded earnings before interest, taxes, depreciation and amortization (EBITDA) of R$563.5 million, the worst result in the last seven years.

The performance is a consequence of the current cattle production cycle in the United States. The retention of matrices for the production of calves reduced the supply of animals for slaughter, raising prices much faster than the ability to pass them on to the consumer.

Given the inflationary situation in the United States, American consumers have experienced a bit of the common reality in Brazil. “Meat prices [bovina] Higher prices have driven demand for pork and chicken. In beef, we have seen a demand for cuts with lower prices”, said Wesley Batista Filho, president of JBS USA.

For Batista Filho, there is nothing structural identified on the market. According to him, the American operation underwent both changes in the commercial and industrial areas throughout 2023. “Efficiency has been improving, but it is not yet 100%,” he told analysts.