JBS profit fell sharply in the third quarter after weaker operating results across several businesses outweighed a small increase in revenue, underscoring how uneven livestock supplies, export-market changes and pressure on consumer demand are affecting the global meat trade. Net income attributable to the company fell to $164 million for the three months ended September 30, from $581 million a year earlier, while adjusted EBITDA under International Financial Reporting Standards dropped 35.6% to $1.181 billion.
The figures, released on November 9, show a business still generating more than $22 billion in quarterly sales but converting a smaller share of that revenue into operating earnings. JBS said the operating environment had become more difficult in several divisions. Its North American beef business returned to positive adjusted EBITDA under US accounting standards, but that improvement was not enough to offset weaker results in poultry, pork, Brazil and Australia.
Net sales reached $22.738 billion, compared with $22.597 billion in the third quarter of 2025, an increase of about 0.6%. The relatively stable top line concealed a much larger deterioration below it. Adjusted EBITDA under IFRS declined to $1.181 billion from $1.835 billion, while the company’s US GAAP adjusted EBITDA measure fell to $1.001 billion from $1.624 billion. Adjusted operating income under IFRS dropped to $521 million from $1.251 billion.
JBS reported earnings of 15 cents per share, against 52 cents a year earlier. Adjusted earnings per share were 16 cents, compared with 54 cents in the corresponding quarter of 2025. The decline reflects more than one isolated problem: the company operates across beef, pork, poultry, prepared foods and aquaculture, and the economics of those businesses moved in different directions during the quarter.
The nine-month figures underline the scale of the change. Revenue for January through September rose to $68.246 billion from $63.121 billion, but adjusted EBITDA under IFRS fell to $3.744 billion from $5.116 billion. Net income attributable to JBS was $283 million for the first nine months, down from $1.609 billion a year earlier. Higher sales therefore did not translate into stronger earnings, as input costs, pricing conditions and product mix weighed on profitability.
Cash generation also weakened. JBS recorded negative free cash flow of $167 million in the third quarter, a year-on-year deterioration of $551 million. The company attributed the change to lower adjusted EBITDA and heavier working-capital use, particularly inventories held in Brazil and Europe. Those stocks included grain and poultry inventories at Seara and beef products in Brazil being prepared for shipments to China in the fourth quarter.
The inventory build has a commercial explanation, but it still ties up cash before the goods are sold and paid for. JBS said Brazilian beef inventories were being positioned to meet demand associated with China’s 2027 import quota. The timing of those shipments, the prices achieved and the pace at which customers take delivery will help determine whether the working capital converts into cash in coming quarters.
The most encouraging part of the results came from JBS Beef North America. The company said the division’s operating conditions improved during the quarter as processing capacity adjusted, key cattle crossings between the United States and Mexico reopened, heavier animals reached processors more quickly and demand for beef remained firm.
Under US GAAP, the North American beef unit generated adjusted EBITDA of $21 million, with a margin of 0.3%. That compared with a loss of $46 million and a negative margin of 0.6% a year earlier. The IFRS presentation was more cautious: adjusted EBITDA for the same business was negative $2 million, with a margin close to zero. The accounting bases should not be mixed, but both sets of figures show that the division moved materially closer to breakeven.
JBS reported North American beef sales of $7.558 billion, up 4.3% from the year-earlier quarter. The company also said monthly margins improved as the quarter progressed, moving from negative territory in July to breakeven in August and positive territory in September. That sequence suggests the business was gaining traction before the reporting period ended, although one quarter does not establish that the cattle cycle has turned.
US beef processors have faced a prolonged shortage of cattle, which has pushed livestock costs higher and made it harder to keep plants operating at efficient levels. Rebuilding a cattle herd takes time: producers must retain breeding animals and wait through several production stages before additional supplies reach slaughterhouses. A reopening of cross-border cattle movements can ease some of the immediate pressure, but it does not by itself resolve a structural supply shortage.
In comments reported by Reuters and Folha de S.Paulo, JBS executives pointed to the possibility of better conditions in 2027 as cattle availability improves and the business benefits from more stable imports from Mexico. That is management’s outlook rather than a guaranteed forecast. The timing will depend on animal health controls, border arrangements, feed costs, consumer demand and the pace at which ranchers expand herds.
JBS Brazil recorded third-quarter net sales of $4.093 billion, down 1.6% from a year earlier. Adjusted EBITDA under IFRS fell 54% to $141 million, and the margin narrowed to 3.4% from 7.4%. The company attributed the lower export performance in part to reduced shipments to China after the completion of the 2026 quota that had allowed qualifying imports at a more favourable tariff rate.
The quota system matters because China is a major destination for Brazilian beef. When the annual allowance is exhausted, exporters face a different tariff environment and may adjust shipment timing, prices or the mix of customers they serve. JBS said Chinese buyers began securing volumes for the 2027 quota early in the fourth quarter, helping exports recover from the slower period at the end of the previous quota cycle.
The company also said higher cattle prices weighed on its Brazilian profitability. Domestic sales were supported by its retailer relationship programme and a wider range of value-added products, but that did not fully offset lower export volumes and higher procurement costs. The build-up of beef inventory for later shipments to China also contributed to the negative free-cash-flow result.
For Brazil’s wider meat sector, the figures show how a change in trade access can influence factory utilisation, inventory decisions and cash requirements. A strong export market can support prices for producers, but a quota transition can create a gap between the time animals are purchased, products are processed and shipments generate revenue. That timing risk is especially important for companies operating at large scale.
JBS’s poultry business Seara was more resilient on revenue and adjusted EBITDA than several other divisions. Sales rose 6.4% to $2.511 billion, while IFRS adjusted EBITDA increased 2.5% to $331 million. Its margin, however, eased to 13.2% from 13.7%. Fresh poultry exports benefited from stronger prices and volumes, and the company said September set a record for export volume. Pork exports remained under pressure from abundant global supply.
Pilgrim’s Pride, JBS’s poultry business in the United States and other markets, had a weaker quarter. Its IFRS adjusted EBITDA fell to $462 million from $770 million, and its margin declined to 9.9% from 16.2%. JBS cited a more difficult operating environment even as US chicken demand continued to grow through retail and food-service channels. More product supply can support volumes while still making it harder for producers to protect margins.
The pork business faced a different combination of pressures. JBS said softer US consumer demand, inflation-related pressure on household spending and increased global pork supply affected sales volumes and average prices. The company has been expanding branded and value-added products in an effort to reduce its exposure to swings in commodity markets, but that strategy takes time to change the earnings profile of a large processing network.
In Australia, JBS sales rose 13.7% to $2.494 billion, but adjusted EBITDA under IFRS fell 20.6% to $198 million. The company cited higher cattle and lamb costs, difficult conditions in beef and the completion of quotas in key export markets, including China and South Korea. Lower shipments to the United States also weighed on performance. JBS said continued rainfall improved pasture conditions, which could support livestock availability over a longer period, but higher animal costs had already reduced quarterly margins.
JBS ended the quarter with net debt of about $19.3 billion, compared with $16.6 billion a year earlier. Its net-debt-to-adjusted-EBITDA leverage ratio rose to 3.54 times from 2.39 times. Interest coverage fell to 4.34 times from 6.84 times, showing that lower operating earnings reduced the cushion available to meet financing costs.
The company said it had total liquidity of $8.2 billion after increasing its revolving credit facility to $4.2 billion. Average debt maturity was 14.4 years, average borrowing cost was 5.7%, and more than 95% of debt was at fixed rates. JBS also said it did not face material debt maturities over the next five years. Those features reduce near-term refinancing pressure, but they do not remove the need to restore operating cash flow and bring leverage down.
For investors, the key issue is whether the North American beef recovery and the return of Brazilian export volumes can offset continued pressure in poultry, pork and Australia. The next results will also show whether inventories built for later shipments have been converted into sales and cash, rather than remaining on the balance sheet for longer than planned.
For food buyers and consumers, a company’s quarterly margin decline does not translate automatically into a particular retail price change. Meat prices are shaped by livestock supply, feed costs, processing capacity, trade rules, currency movements, logistics and demand in each market. JBS’s results are important because of its scale across several major protein markets, but they are not a direct forecast of supermarket prices in any one country.
JBS management was scheduled to discuss the results with investors on November 10. The questions to watch are how quickly US cattle supplies can improve, how much of Brazil’s planned China shipments are completed, and whether the company can turn higher revenue into stronger earnings and cash generation without adding further pressure to its balance sheet.
Comments (0)
Be the first to comment. Comments are published after moderation.