Brazilian meat packer JBS posted a much larger-than-expected first-quarter loss on Thursday, but its shares jumped the day after it announced a corporate reorganization to bring together international operations.
JBS, the world's biggest meat packer, lost 2.741 billion reais ($795.32 million) on currency hedging costs and poor results on the company's U.S. cattle operations. Analysts polled by Thomson Reuters had expected a loss of 1.1 billion reais.
Chief Executive Wesley Batista said the company had reduced its hedging position since late March and that the U.S. cattle cycle is improving, meaning the company should avoid a loss in the second quarter.
On Wednesday, São Paulo-based JBS said it will create JBS Foods International, an Ireland-based company whose assets will encompass global operations and those of Brazil-based food processor Seara Alimentos.
JBS shares jumped 17.3 percent, leading gains on the Bovespa index. Analysts at Brokerage Brasil Plural said the change diminished JBS's capital costs, unlocking shareholder value.
JBS is not focused on acquisitions in 2016, but rather on consolidating its recent purchases and reducing leverage closer to 2 times its earnings before interest, taxes, depreciation and amortization, or EBITDA, Batista said.
EBITDA totaled 2.137 billion reais in the quarter, down 22.5 percent from a year earlier.
Batista also said the Senate's decision to put President Dilma Rousseff on trial, removing her from office for up to six months, is positive for the Brazilian market and that the currency, the real, would continue to strengthen.
JBS, once a family-run butcher, grew into a global player during the past decade, catching a wave of Workers Party policies to stimulate home-grown conglomerates.