JBS pursues US share listing plan after COVID-19 fallout

Brazil’s JBS SA is reviving plans to list shares on Wall Street after dealing with the fallout of the coronavirus pandemic.
calendar icon 17 August 2020
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Reuters reports that JBS CEO Gilberto Tomazoni announced the plans on 14 August after the meat packing giant posted stronger-than-expected quarterly results.

Speaking on a conference call with analysts following the company's second-quarter results, Tomazoni said the focus is turning towards the Wall Street listing now that the worst of the COVID-19 outbreak appears to have passed.

"In the last quarter we said we would prioritise the protection of our people and tackle the operating challenges imposed by the pandemic," Tomazoni said.

"Now things are more under control. We have learned to deal with the challenges. We are again discussing the listing," he said.

Despite the volatility caused by the pandemic, JBS late on Thursday 13 August posted quarterly net profits that were nearly twice as high as the average of analysts' estimates, buoyed by a strong performance in its beef and pork divisions at home and in the United States.

JBS shares rose 4 percent in early trading on Friday 14 August but later trimmed gains to trade 1 percent higher.

Regarding the timing for the US listing, Tomazoni said "it cannot happen this year" given the steps needed to complete such an undertaking.

JBS managers also said the company will cut financial expenses by an estimated $100 million this year.

Chief Financial Officer Guilherme Cavalcanti noted, hypothetically, that if JBS exchanged all of its debt for a 10-year bond, it could reduce financial expenses by a further $100 million given its good credit rating.

In the second quarter, JBS' leverage ratio fell to 1.75x in dollars, its lowest in history.

"In terms of financial performance, this was a quarter to remember," Banco BTG Pactual analysts said in a note to clients on Friday 14 August.

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