JBS Posts $301 Million Fourth-Quarter Loss on BNDES Penalty Fee, Feed Cost

JBS SA (JBSS3), the world’s largest beef producer, posted a loss in the fourth quarter after it paid a penalty to Brazil’s development bank for extending the deadline on its planned U.S. unit’s initial public offering.

The company’s net loss of 499.5 million reais ($300.8 million) compared with net income of 127.9 million reais a year earlier, Sao Paulo-based JBS said today in a statement to Brazil’s securities regulator. Excluding some items, the net loss was 145.7 million reais, beating the 102.3 million-real average estimate of three analysts in a Bloomberg survey.

JBS paid 521.9 million reais in December to Brazil’s development bank, known as BNDES, after it delayed an IPO of its U.S. unit. In 2009, BNDES purchased $2 billion of bonds from JBS in a private placement that gave the bank the right to either convert the debt into shares of the U.S. unit or the parent company. JBS paid the fee to extend the deadline into 2011.

“The penalty fee was a drag on the company,” Ricardo Boiati, an equity analyst at Banco Bradesco SA, said in a telephone interview from Sao Paulo before results were released. “Higher feed costs, especially in the U.S., didn’t help them either,” said Boiati, who rates the stock “market perform.”

Corn prices averaged 45 percent higher in the fourth quarter compared with a year earlier, while soybeans were 24 percent higher. Corn and soybeans are two main ingredients used as animal feed.

“High feed costs should continue to pressure margins this year,” Boiati said.

Net sales jumped 93 percent to 14.3 billion reais, from 7.41 billion reais a year earlier, after the acquisition of Brazil’s Bertin SA and Pilgrim’s Pride Corp. (PPC) JBS said in a Nov. 9 statement that it paid $41.7 million to raise its stake in Pilgrim’s Pride to 67.3 percent from 64 percent.

JBS fell 10 centavos, or 1.6 percent, to 5.98 reais as of 10:22 a.m. in Sao Paulo.

JBS didn’t report per-share earnings figures.