Q1 2025 JBS SA Earnings Call
This meeting is being recorded.
Good morning, and welcome to Jbs.
Yes.
First quarter.
Great.
Our next conference call.
At this time all participants are in a listen only mode.
<unk>.
Conduct a question and answer session and instructions will be.
That time.
As a reminder, this conference is being recorded.
Any statements eventually made during this conference call in connection with the company, because natural oak projections operating and financial targets and they show girl should be understood as marriage forecast based on the company's management expectation in relation to the future of Jbs.
Such expectation I harsh depend on market conditions on Brazil's overall economic performance.
Industry and international market behavior, and therefore <unk>.
Subject to change.
Zubair: Present with us today Zubair.
Zubair: <unk> Global CEO of Jbs do let me cover catch a global CFO of Jbs wisely by choose the fever CEO of Jbs, USA and Chris Genesis Investor Relations Director now I'll turn the conference over to Jill Baker <unk> Global CEO of Jbs, We took a pause on it you may do.
Zubair: In your presentation.
Zubair: Good morning, everyone. Thank you for joining.
Zubair: Joining us today for <unk> Gold's gym.
Zubair: Yes.
Zubair: You need 2025, we do one of the strongest brick plaza resolved in Italy.
Zubair: In yet another demonstration of the strengths of our diversified global platform.
Zubair: Net sales rose.
Zubair: 845% in U S dollar in net profit to jump at 50.
Zubair: 5%.
Zubair: And EBITDA margin of seven 8%.
Zubair: A remarkable performance in what is a typical a softer market for the global growth in <unk>.
Zubair: After.
Zubair: Our results with genome to validate the strategy decisions, we have made using that of management our platform.
Zubair: We are also advancing our goal what our jewel abuse D G.
Zubair: J D S shared in both Brazil, and you add in United States.
Zubair: Following the completion of Arctic relations with the U S Securities Exchange Commission.
Zubair: While our proven by our minority shareholders is established we will earmark, a new chapter in the company journey.
Zubair: We believe it would only see hey, hahne, our international visibility.
Zubair: Brad you investors input his passion, our position as a global leader in food.
Zubair: Our boldly embark debuted in Brazil, United States, where it's been.
Zubair: But this quarter.
Zubair: Yeah.
Zubair: <unk> delivered a record fourth quarter EBITDA margin of 19, 8% and 14, 8% respectively.
Zubair: I want to emphasize that cri.
Zubair: Pharma to reflect that discipline and focus on operational excellence.
Zubair: Position that across domestic and international market cap.
Zubair: During.
Zubair: Through.
Zubair: Product mix optimization, and a strong focus on innovation.
Zubair: With the launch of new category in Brazil, such as the Alfredo branded products lie in the co branded partnership with net lease.
Zubair: The business continues to strengthen its portfolio of high value added offering.
Zubair: <unk> results were driven by solid demand.
Zubair: He had been a portfolio management and the stable grain cost.
Zubair: Jamie as you asked what Alice delivered a strong performance supported by higher sales volume and a favorable supply demand and dynamic.
Zubair: Given an EBITDA margin of 12, 5%.
Zubair: Our strategy of juggernaut in brokerage and diversification.
Zubair: Janus two yielded positive results.
Zubair: Even the ongoing margin pressure for Jbs beef North America.
Zubair: The beef business in Brazil, and Australia and benefit from the respective castle cycle in both countries.
Zubair: At three boy a full could remain in the pearsall excellent.
Zubair: Expanding the value added portfolio and increased market access.
Zubair: In Australia, where the cycle is expected to remain favorable in the common granted result results reflect operational improvement and export rule.
Zubair: Despite being a wildcard that typically sees higher cash consumption.
Zubair: Company leverage ratio stood at one point to 99 times EBITDA.
Zubair: EBITDA in U S.
Zubair: <unk> volume.
Zubair: We are well below the 3.6 ish.
Zubair: 66 times EBITDA and wanted at this game.
Period last year.
Zubair: Colgate, our RFID necessarily stretched net sales project Guangdong region, Nice $19 5 billion with adjusted EBITDA of one 5 billion U S dollar.
Zubair: We remain confident in our long term stoppage.
Zubair: Operational excellence.
Zubair: Through diversification innovation value added product and the strong brands.
Zubair: The strength of our global plasma farnell combine of Davita discipline discipline kept dollar location market diversification in our capacity to innovate support value creation for all of our stakeholders, including our D members customers and investors reduces partners and consumers.
Zubair: Yeah.
Zubair: Finally, our FERC Wydra results real reaffirm our condition that we are in the right path.
Zubair: Delivering consistent growth expanding margin and rebranding J P as what a new cycle of opportunities.
Gilead: Thank you again for joining us today, I will pass them to the call over to Gilead.
Gilead: Read that throughout our financial results and market data.
Speaker Change: Please go ahead.
Speaker Change: Thank you <unk>, let's now move onto the operational and financial highlights of the first block of 2025, starting on slide 10. Please.
Speaker Change: Net revenues for the first Florida was $19 $5 million adjusted EBITDA totaled one $5 million and represents a margin of seven 8% in the park.
Speaker Change: Net profit was $500 million in big box, excluding the non recurring items adjusted net income would be $572 million.
Speaker Change: Moving on to the next slide the first quarter was 1095 operating cash flow recorded a negative result.
Speaker Change: $285 million, while free cash flow was negative by <unk> $917 million. The main variations that impacted cash flow in the animal comparable worse.
Speaker Change: The increase in <unk> payment in the amount of $206 million driven by solid results, mainly from <unk> U S fourth in Australia.
Speaker Change: Increasing working gasoline backend, mainly by dig royalties increased due to the highest cost of capital in the U S and Brazil.
Speaker Change: The increase in margin deposits for our hedge positions in the futures market driven by the rising general prices in U S.
Speaker Change: And the payment of antitrust related settlement in the amount of $140 million.
Speaker Change: Moving onto the slide 13 netback in the first quarter ended at $14 $8 million, a reduction of $1 $1 billion compared to the previous year.
Speaker Change: I would also like to highlight some of the messages we have made in liability management, which allowed us to reach an average term.
Speaker Change: Of approximately 12 years and an average cost of five 4%.
Speaker Change: In January 2035, and issued bonds totaling $1 $75 billion with strong demand for these securities in March we issued a code hospitals, Seattle for approximately $123 million.
Speaker Change: The first the issuance with a 38.
Speaker Change: 30th termed the Lois in the Brazilian KEPCO marked.
Speaker Change: As a subsequent event in May we repurchased 850 million lodging senior notes due to 2030 and file a niche Lewis our new of a new crop through Seattle for a total amount between 141 million and $176 million.
Speaker Change: Leveraging dollars liquidity in one year from 366 times to 199 times in the first quarter just dove Indentified. The decrease is due to the expansion of EBITDA and debt reduction.
Speaker Change: Finally, I would like to highlight that in the general meeting the shareholders approved the distribution of $789 million in dividends equivalent to <unk> 30 cents per share which will be paid today.
Speaker Change: It is worth remembering that we still have 17 stance.
Speaker Change: To be distributed in the event of approval of the dual listing.
Speaker Change: I will now briefly go through the business units.
Speaker Change: Starting with Seattle on Slide 14, net revenue growth in the Walker was 3% while profitability grew approximately eight percentage points, reaching 19, 8% EBITDA margin a record blended bloodsport.
Speaker Change: This result is a consequence of a better commercial and operational execution, the strong global demand for poultry and pork and expansion of the bedroom added portfolio.
Speaker Change: Moving onto the slide 15, and the first squashed up 85, Jbs, Brazil record net revenue, 10% higher than in the first class without 24, as a result of strong international demand and higher pricing the domestic market, which working vantage will offset the sharp increase in cattle prices.
Speaker Change: The EBITDA margin reached four 1% at the licensed dropped year over year.
Speaker Change: Moving on to the July 16, Rena and now speaking daughters, 80 U S get J B S. These north American net revenue in the first quarter 2005 through 15% compared to the previous year as a result of the strong demand that drove get out to record levels in the U S. However, profitability continues to be pressured by the challenging cattle.
Speaker Change: Michael which has also kept the price of live cattle at record levels.
Speaker Change: On slide 17, we have Jbs, Australia D&O compares will get 12% revenue growth is mainly due to the higher volumes sold in beef exports. The EBITDA margin reached 10.4% an increase of 1.3 percentage points in D&O comparisons as a result of the greenhill.
Speaker Change: Availability of animals for the lager and gains in the operational efficiencies.
Speaker Change: Turning now to Jbs USA pork net revenue for the quarter grew 5% year over year reflect the highest prices driven by strong demand Qualcomm consumption is also being helped by the average price of beef, which remains high once again jbs USA pork demonstrated consistent and <unk>.
Speaker Change: So all the data you need to read those hard to parse this delivering an EBITDA margin of 11, 1%.
Speaker Change: It was by the highlighted on slide 19 reported a 2% increase in net revenue in deepwater in the first quarter sub 95 P was deliberate.
Speaker Change: <unk> performance, reflecting the consistent execution of its strategy and the resilience of its booked five bush part across all regions ready to grades.
Speaker Change: Company maintained robust margins driven by operational gains and the continued strengthening of strategic partnerships with key customers even in the face of a volatile scenario.
Speaker Change: With that in mind I would like to open up for the Q&A session.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. If you have a question click the raise of Henk bad debt at this time.
Speaker Change: Mid point of your question is answered you can remove yourself from the queue, Mike linking lower hand.
Speaker Change: In our first question comes from Bank <unk> Barclays. Please go ahead.
Speaker Change: Yeah. Good morning, <unk>. Thank you very much for opening up for questions here.
Speaker Change: Two questions for you so number one.
Speaker Change: You talked a little bit about this on the call earlier tomorrow, but I guess, there was a little bit.
Speaker Change: A few things were lost in translation literally.
Speaker Change: As it relates to these recommendations for the voting on the dual listing which is upcoming in about 10 days.
How do you feel about your ability to really talk to investors and how has the feedback been just from some of these investors that tend to two boat along these proxies to get a little bit of a sense. How you. How you think about the outcome of devoting next week and what is what is under your control that that will be my first question and then I have a second one on your on your operations.
Speaker Change: Yeah.
Speaker Change: Okay. So we don't have access to roads and.
Speaker Change: The growth comes closer into the General Assembly.
Speaker Change: So basically we don't know how.
Speaker Change: How many of those specially funds will follow the proxy of the agencies.
Speaker Change: Huawei being continues you'll be talking to two shareholders are.
Speaker Change: Showing the importance of our dams, you'll come to vote, yes, a lot of funds generally never comes to generate Sami. So we are stressing did in Gordon's.
Speaker Change: For the ones that see continued stocking.
Speaker Change: Okay. Thank you very much for a good luck with that and then second just on the beef business in the U S and you flagged a couple of things in terms of like export headwinds because of lever off particularly in the second quarter. What is upcoming in terms of just from a tariff perspective.
Speaker Change: But also at the same time I mean, clearly cabinet price just continued to go up so as you look at the current environment.
Speaker Change: What are you seeing or what signs are you seeing in terms of of just starting a rebuilt and what the implications are for you guys here and second as it relates to these trade flows.
Speaker Change: How how much of an impact should we think about this into queue just dramatic from a from a margin perspective for a dollar amount or any anything you can share with us as to the impact from these tariff implications on exports.
Speaker Change: Ben Good morning, a few things so.
For sure. We're seeing 2025 are much more difficult year than 2024 from a margin perspective, we are seeing some signs of.
Speaker Change: Heard.
Speaker Change: Heard revealed if you if you want to say that because what we're seeing is a much lower Q or much lower processing of a female of non fed animals.
Speaker Change: About 14% versus same time last year, which is already a year 'twenty 'twenty four was already much lower than in 2023. So we continue to see.
Speaker Change: That and that is encouraging is not as fast.
Speaker Change: We would like and is not as intense as we would like but they are a positive sign for her review. So we still expect that 2026 would be a better year than 2025.
Speaker Change: But probably not 100% out of the wood.
Yes.
Speaker Change: When it comes to tariffs and trade trade.
Speaker Change: Disruption.
Speaker Change: We think that this whole this whole scenario of trade that we had right before it has weakened wood was costing us from a margin perspective about one to one 5% a.
Speaker Change: We're simply pointing Martin.
Speaker Change: And like I said in the previous call a lot of that was coming from actually our byproducts a lot of high school go to China and get process there.
Speaker Change: So that was a very important mark that is a very important market for <unk>. So.
Speaker Change: Since that that's kind of gone away.
Speaker Change: We see that its probably just going to be back half of the half of the quarter. So you wouldn't be a fully back in the quarter.
Speaker Change: With that also.
Speaker Change: Yeah.
Speaker Change: We're seeing.
Speaker Change: 225 will be a challenging year Q2 will be very challenging compared to same time last year.
Speaker Change: The one thing that we're seeing more than ever and we're very confident about is that.
Speaker Change: And we were being able to see this in the current book boarded over present, and we're certainly going to be able to see that in the second quarter is even though.
Speaker Change: The U S beef business continues to be challenging we're going to be able to continue to improve.
Speaker Change: To show relatively stable margins given the diversification of the business. So we're seeing.
Speaker Change: As the U S has does this challenges we're seeing positives in other geographies and another project. So we continue to be very confident actually we think that this whole this whole.
Speaker Change: Diversification advantage is going to be.
Speaker Change: More more clear than ever.
Speaker Change: <unk> said that means for our business.
Speaker Change: So with it just to confirm that's 100 to 150 basis points in the second quarter basically for the first half of tariffs there was nothing in the first quarter correct you're correct. Okay. That's it. Thank you very much I'll pass it up.
Speaker Change: Okay.
Our next question comes from Priya <unk> Gupta with Barclays. Please go ahead.
Speaker Change: Good morning, and thank you for taking the question I was wondering if I could just follow along with the last point that we were discussing around some of the impact to second quarter I think.
Speaker Change: Jeremy you had spoken previously about your expectation that EBITDA for this year would end up being close to flat year on year.
Speaker Change: Is that still something that seems achievable just given what youre seeing on the USB business tariffs and just overall sort of what's happening in the second quarter.
Speaker Change: And then I had just a couple of follow ups. Thanks.
Priya: Hi, Priya.
Priya: I never gave this kind of guidance or expectation of let's call. It just made a farmer.
Speaker Change: <unk> calculation, so I gave a what they call the breakeven EBITDA. So what would be the EBITDA that it makes my free cash flow will sure zero and this was around $4 $5 billion. So I'd just add that in case, we have the same EBITDA that would be how much cash we would be generating even that but.
Priya: It was not an expectation of 40.
Speaker Change: For the year.
Speaker Change: The only thing that I can say about it is at least bus Barker our last 12 month EBITDA.
Speaker Change: He is now seven $4 billion.
Speaker Change: So again, we have all of the rest of the year.
Speaker Change: To see how much it could be a compare.
Speaker Change: Compare to the previous years, but again, it's early to say.
Speaker Change: Got it. Thank you that's helpful. And then two just a quick follow up.
Speaker Change: First how are you thinking about the potential for that reduction over the rest of the year as well as maybe taking out the rest of the 20 <unk> nodes and then.
Speaker Change: You talked a little bit about what youre seeing with U S consumer behavior.
Speaker Change: But can you tell us a little bit about what youre seeing on the retail side in terms of promotions.
Speaker Change: How that might be helping sort of demand for different proteins and what that would look like into the grilling season. Thank you.
Speaker Change: Okay. So I guess two two.
Speaker Change: Who called into the rest of 2030, the possibility up eight.
Speaker Change: In the case of our liability management be are always extending the maturities.
Speaker Change: So we could be doing new issuance of 10, and 30 and take out. The for example could be that 2030 year or it could be this is also the source of maturities because it is a constantly exercise of extending the maturity is to have these are profitable amortization schedule.
Speaker Change: So for the year in terms of debt reduction.
Speaker Change: We will be think of course, we will generally generate castle second third and fourth quarter.
Speaker Change: So, but they also paying dividends we already paid.
Dave: Dave we announced with <unk> today, and we have also the dividends debt.
Speaker Change: We will be pain.
Speaker Change: In the U in the case of the dual listing being a proven so.
Speaker Change: Laurel as the band on how much cash generated compared to the dividends that we pay but the important thing is that our leverage is currently at two times ranked $1 99.
Speaker Change: So we think that they will be able to finish the year.
Speaker Change: On our long term goal, which is between two and three times. So that's what Americans over leverage.
Speaker Change: It will be very low of course confident that they'll be busy on a two and a half size range more or less a.
Speaker Change: Which is a very comfortable also confirmed even though our cost of debt, which is five 4% and given that over to the amortization schedule and more lag Vince you mentioned that maybe you'd be maybe doing throughout the year career, then on U S. Consumer we were seeing an overall stronger.
Speaker Change: <unk> for the three proteins.
Speaker Change: When it comes to beef.
Speaker Change: It's a good we have seen as we.
Speaker Change: We yes, we are we have a slower a lower.
Speaker Change: Processing of fed cattle.
Speaker Change: But we also have a much higher weights weights are up more than 3%. This year. So overall, we felt like we have a lot less beef, we actually have a little bit more beef to sell when it comes to fed beef without the cost without the non fed animals and still with that we were having a 9% valuation of Av.
Speaker Change: Our our cut out year over year on the first quarter. So this means to us very clearly that it's demand driven and demand as it is strong and we see that across the three broken sometimes given the next couple of different just an example.
Speaker Change: Overall, we're seeing a trend also that of consumers moving from foodservice to two two retail that's no news disease.
Speaker Change: This is something we've been talking.
Speaker Change: For a while but I don't I don't see bria, there's necessarily because.
Speaker Change: The retail is.
Doing some sort of aggressive features in all of them I mean more than that I don't think its to do something specific is the other thing is just the trend that we're seeing more.
Speaker Change: Per value too.
Speaker Change: At a good new at home versus eating out and that's more to do adapt and then any specific.
Speaker Change: Future activities.
Speaker Change: Great. Thank you so much.
Yes.
Speaker Change: Our next question comes from his car dwell visa with Morgan Stanley. Please go ahead.
Speaker Change: Sure.
Speaker Change: Hey, everyone. Thanks for the follow up.
Speaker Change: Okay.
Speaker Change: <unk> a question for Glen.
Speaker Change: While the EBITDA.
Speaker Change: The generation of the quarter was above expectations.
Speaker Change: I'm getting a lot of questions on free cash flow, particularly on working capital.
Speaker Change: Do you think that.
Speaker Change: Are we able to to go over at least the main lines, how they could evolve in the next couple of quarters I mean, we discussed and battery in the previous call. So maybe if we can go over a couple of lines just to to make sure that we can still work with a scenario of I believe correct me if I'm wrong 300.
Speaker Change: $150 million of consumption for the year.
Speaker Change: I think that that would be <unk>.
Speaker Change: Helpful.
Speaker Change: And then a quick follow up to Wesley.
Speaker Change: Thanks for the comments, whether they own the 1% 0.1 to one five percentage point impact on the beef side I think that that was a good clarification, but.
Speaker Change: <unk> speaking.
Speaker Change: Is it only leather can you just go over more what is impacting the what are the impacts related to the tariffs.
Speaker Change: Where exactly heavy have you been restricted to operate out of the U S.
Speaker Change: We know the issues with exports to China, but is it more relevant to be for is your pork operations. The U S also significantly impacted in the second quarter.
Speaker Change: And I guess more importantly.
Speaker Change: How fast can your operation really react to that.
Speaker Change: We talk about half of the quarter being impacted but is it really really fast for us to recover to a normalized operation.
Speaker Change: Going forward. Thank.
Speaker Change: Thank you very much everybody.
Speaker Change: Okay got it so as as you listed on the previous call.
Working capital consumption.
Speaker Change: It was mainly due because first Parker is a part where you recalled closings increased unloading bandwidth, where repo bolted on higher prices of raw material.
Speaker Change: Mainly cattle and also grains, so going forward it to all defense.
Speaker Change: As the market demands and needs to be able to sell boding vantreese at prices that field generates positive cash flow. So it's early to say, but basically what our inventory with wassa rebuilds on higher prices and now depends on how much the market for <unk>.
Speaker Change: Our process will be.
Speaker Change: Commercializing throughout the years.
Speaker Change: Because just on this whole trade.
And then.
Speaker Change: With the tariffs and all of that in China, Mr. Separate two different two different impacts one of them was the high <unk>.
Speaker Change: The.
Speaker Change: China and the U S put against each other so.
Speaker Change: Had one impact of <unk>.
Speaker Change: The impact was.
Speaker Change: Beef access to the U S. Today there is.
Basically the U S. These plants are not approved to export to China those are two different.
Speaker Change: Things that are separate.
Speaker Change: One of them, obviously got brought.
Speaker Change:
Speaker Change: Improved and it is this deal between the U S and China to lower tariffs, obviously has an immediate impact.
Speaker Change: On on the market, except for beef going to China, because that's an approval plant approval.
Speaker Change: <unk>.
Speaker Change: Saying that we.
Speaker Change: That hasn't changed so.
Speaker Change: On the beef side.
Speaker Change: The larger part of the impact that I mentioned is as high as irrelevant part.
Speaker Change: Probably the most relevant because a lot of them went there and it's.
Speaker Change: <unk>.
Speaker Change: A larger share of the total export of hides was China. So.
Speaker Change: It was more difficult to maneuver to other markets.
Speaker Change: Beef is not the same as Highlander.
Speaker Change: If we have other markets that we can so we can continue to export.
Speaker Change: Hum.
Speaker Change: And ever.
Speaker Change: The appropriate.
Speaker Change: Finished to that product so.
Speaker Change: So beef part of that is the whole heights deal whenever we have the service coming back to a lower level, it's pretty muted the reaction.
Speaker Change: Capability that we have.
Speaker Change: On the beef side on the meat side, that's going to take longer to longer time, we have to regain our approvals to China. So that's going to take a longer time, but like I said before the largest part of the of the loss that I mentioned is hyped.
Speaker Change: Bork's idea there was also relatively.
Speaker Change: Relatively similar loss on the pork side when it comes to the.
Speaker Change: As tariffs, but 1% to 1% one 5% percentage points.
Speaker Change: But.
Speaker Change: But it was all tariff he wasn't plant approval and as as the tariffs come back to a lower level.
Speaker Change: The reaction.
Speaker Change: Time is pretty quick it's not it's not something that takes too long through to regain.
Speaker Change: Access and continue to export.
Wednesday: Super clear Wednesday, thanks, so much for the clarification and thanks, Glenn as well.
Carlos Laboy: Our next question comes from Carlos Laboy with HSBC. Please go ahead.
Speaker Change: Excuse me Mr. Carlos Laboy, you May go ahead.
Carlos Laboy: There we go is that better.
Speaker Change: We can hear you good morning.
Speaker Change: Good morning Westlake.
Speaker Change: I was hoping you could.
Speaker Change: Review for us the different key areas of your U S beef operation and.
Whether you're happy with the capabilities and the performance that you're having in the key areas and if theres any areas in particular that youre looking for for capability or performance improvement over the next year or two.
Speaker Change: Carloads were very we're actually we're very very.
Speaker Change: Relative to the job the team has done.
Speaker Change: Over the last two years.
Speaker Change: We have significantly improved our operations the numbers the numbers, though right when you compare.
Speaker Change: The our result from 'twenty four to 'twenty three I've mentioned that in a previous call I think it is pretty early because you know when you look at market data in 2024 was a much tougher year than 2023, and our margin was pretty stable showed that we were able to capture a lot internally.
Speaker Change: And we see that actually improving into 2025, so even though the market is.
Speaker Change: It is pretty difficult.
Speaker Change: And pretty challenging.
Speaker Change: Where we are.
Speaker Change: We think our corporation today is very very competitive there is things to continue to improve and there is we're very focused on that but.
Speaker Change: But the the performance today, we see a very very competitive again.
Speaker Change: We're always going to have more do we want to we want to get in more do we want to improve our business.
Speaker Change: But today, we have a very very competitive beef business in the U S.
Speaker Change: Thank you.
Our next question comes from John Baugh with Mizuho. Please go ahead.
Yes.
Speaker Change: Excuse me, Mr. John PR microphone on mute.
Speaker Change: Oh can you hear me now.
Speaker Change: Good morning.
Speaker Change: Just first question for me on CR are Q1 was the fourth consecutive quarter now that lead to high teens margin and it seems as though more benefits are likely you'll hear from the premium product mix and the efficiencies are passed.
Speaker Change: How should we think about the incremental cost efficiency to be realized from here.
Speaker Change: Is it possible to quantify that and then set against that are there any notable growth investment that you still have to make at this point.
John: Hi, John Thank you if I think about it.
Speaker Change: <unk>.
Speaker Change: John I benefit from the.
Speaker Change: Improvements we have Don.
Speaker Change: Last year and these are these improvement was in operational excellence.
Speaker Change: Efficiency of our operation was a mix management was in pricing.
Speaker Change: And to increase our capacity to produce because we have base.
Speaker Change: A lot of investment in the past and now we are at the vitamin come into the market and these combine all of these things we have.
Speaker Change: We have right now experience using <unk> of my <unk>.
Speaker Change: I'd talk improvement of margin because if you compare.
Speaker Change: The first quarter when they were acquired last year, we had increased who created the cost of the grain is even that Seattle was able to achieve the same results because of the benefit from these improvements and if you look further ahead, we I see that mix.
Speaker Change: <unk>, there will be higher cost upgrade.
Speaker Change: For the first quarter, but the third party, we see now in Brazil.
Speaker Change: Be glad.
Speaker Change: Because of our great.
Speaker Change: Crop, we see the reduction of the NDA.
Speaker Change: The cost of the.
Tom Green: Well, Tom Green, but this focus on behalf of Karl.
Tom Green: I hope Cri can continue to deliver good margin I don't know exactly who cannot estimate exactly to what is the best picked up the margin, but will be will be a very healthy much.
Tom Green: Yes.
Speaker Change: Okay. Thanks for that and then to follow up I'd like to ask you about your diversification strategy and particularly the investment back in January to enter the AG business in Brazil.
Speaker Change: That seems to be a nice opportunity and moving into a lower priced protein and I'm curious how you think about growing this exposure to eggs over time is this something that you're looking to grow more ambitiously relative to agriculture or plant based is it just more of a localized focus in South America or would you consider entering the a category in the U S through M&A as well. Thank you.
Speaker Change: We see it.
Speaker Change: Our culture is a different market for hey, I've got culture, It's a lockup.
Speaker Change: Regulation, we cannot decide with the market didn't start really depends of.
Speaker Change: The license to operate is more we can grow.
Speaker Change: Uh-huh.
Speaker Change: Our volume of where we are in that in the for example.
Speaker Change: But otherwise the list by pool by acquisition here in Detroit, We keep all our priority to grow.
Speaker Change: In this segment is one of the priority and as we enter in Brazil, but <unk> is a global a global protein I think is more global than they love it and are the other proteins and restart to Brazil, but we haven't ambitions to do.
Speaker Change: We did the same we have done with chicken pork and beef are global one of the global mi or whether the leaders in the market.
Speaker Change: Okay. Thank you.
Speaker Change: Yes.
Ben: Our next question comes from Ben <unk> with Barclays. Please go ahead.
Ben: Yes. Thank you very much for squeezing in a follow up I'm, just wondering Australia that was actually pretty strong again and I know we have I think over the last two quarters a couple of issues on the salmon side, but this quarter in particular.
Ben: Really good said was wondering maybe.
Ben: Maybe just because of all that diversification strategy and you've explained already the impact on exports of heights, two from U S to China, how that impacted but wanted to understand if you actually saw on the flip side some benefit in things like exports from Australia into China, offsetting some of that may be getting getting better pricing.
Ben: To ultimately drive those dose better margins because the margin expansion was really good with with over 100 basis points, whereas last year. So just want to understand what what's been driving that.
Ben: But as.
Ben: As we said before that we had in the last quarter the fourth quarter last year.
Ben: Some challenge in terms of the cause of decline too much rain.
Ben: And the challenge is to take the catalyst for the <unk>.
Brett: Second Brett.
Brett: In the first plant that we had not was not sold all of the Gulf crossing the solid growth in Australia, we remain a challenge for that but it was much better than they did if required.
Brett: And the good things about the science.
Brett: The.
Brett: Hertz is increased a lot we are not taking you'll know the all benefit from that I think this is.
Brett: He is a challenge that we had requirement with postpone the benefits are more longer than we had expected to have and we are you are so confident in terms of our strategy of delivering results in the common and common practice in our multi verification Dickey Jesper measure you arc we have.
Brett: Excitingly the parts business, we bought the park visitors into Australia, and we are now making investments improvement on the <unk> and the quality of our operation in terms of investment in farms and our investment in increased productivity bank made a bench market to read the order operational you have in Brazil.
Brett: And you asked and we are so excited about that because of.
Brett: I'll start export grain.
Brett: Any pork pork.
Brett: Dark meat.
Speaker Change: Have you explored great. Because you are you are exposure to international price.
Speaker Change: Is that we are able to producing inside of <unk>. We are we believe that in the future Australia would be.
Speaker Change: Spartan and not net impact insightful debate tennis, Australia is the one off the market we are really.
Speaker Change: With the emphasize that would be.
Speaker Change: One of the opportunities for growing the company.
Speaker Change: Okay got it and then one real quick for D 2 billion Capex number that still holds for the year $2 billion.
Yes, yes got it that's all.
Speaker Change: Okay.
Speaker Change: Our next question comes from Carlos Laboy with HSBC. Please go ahead.
Yes, just a quick follow up please Guillermo can you. Please review for US review for Us again.
Speaker Change: The key dates ahead through completion of a dual listing assuming all goes well.
Speaker Change: So the span that they've that line is definitely furbished on the F. Four is general Assembly on May 23rd.
Speaker Change: The last day of trading of GBS as they do.
Speaker Change: <unk> six versus a day of Bvr's June nine and for <unk> in two days.
Speaker Change: And nicely on the 12, so that's a tentative.
Speaker Change: Timeframes some things in other our control, but that's what we put as a tentative on via <unk>.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, there being no further questions I would like to pass the floor to Mr. Joe <unk> for his closing statements. Please go ahead.
Speaker Change: I want to thank you again for your participation in today's conference call.
Speaker Change: And I want to thank you for all our team members that commitment.
Speaker Change: The daily commitment to deliver.
Speaker Change: The result in the best and.
Speaker Change: We are a way to extend my gratitude from banding and say we are confident for the future of the company that we can keep improving grow in E. G. It creates more opportunity for all of our stakeholders, including our team members. Thank you.
Speaker Change: Okay.
Speaker Change: This is the end of the conference call held by Jbs. Thank you very much for your participation and have a nice day.
Speaker Change: Goodbye.