JBS SA posted an unexpected second-quarter loss on derivatives, rising costs and a stronger Australian dollar, reports Bloomberg. The net loss was 180.8 million reais ($114 million), compared with a profit of 3.7 million reais in the year earlier period.
The company posted a financial loss of 591 million reais in the quarter, from a loss of 539.8 million a year earlier, because of a foreign exchange hedge position. A stronger Australian dollar and rising grain costs also hurt earnings, the company said. Sales increased from 14.1billion reais a year earlier to 14.6 billion reais this quarter.
In a conference call, JBS CEO Wesley Batista said that the company expects improved results from Pilgrim’s Pride Corp. in the fourth quarter. JBS is reducing production of chicken products in the U.S. “to balance supply and demand,” because of an excess of supply in the market, according to Batista. The company is also closing its Dallas plant as it seeks to reduce production costs.