Dive Brief:
- JBS SA reported a 25% decline in net income during the most recent quarter, despite a 32% rise in revenue.
- The world's largest producer and exporter of beef put the blame on finance costs. JBS said hedging expenses and payments to liquidate bonds cost the Brazilian company roughly $440.3 million during the quarter.
- JBS is the parent of U.S.-based Pilgrim's Pride, which earlier reported earnings that were the polar opposite: soaring profit, despite a drop in revenue.
Dive Insight:
The details on JBS hedges aren't entirely clear. But hedges never are. But JBS did say that it incurred losses while seeking to protect revenue from swings in currency (as opposed to hedging to protect against commodity prices, etc.).
Given the wild state of the world's currency markets in recent months and how vulnerable global companies are as a result, hedging is exactly what JBS needs to do and to do well.