JBS S.A. (JBSAY), the global meat processing company, has announced strong financial results for the second quarter of 2024, with significant contributions from its diversified operations. The company reported a net revenue of $19.3 billion, a 5% increase from the previous year, and an adjusted EBITDA of $1.9 billion. The consolidated EBITDA margin stood at 9.8%, and the net income reached $329 million. JBS also declared dividends of $0.37 per share and highlighted the success of its investments in innovation and global diversification strategy.
Key Takeaways
- JBS S.A. recorded a net revenue of $19.3 billion, a 5% year-over-year increase.
- Adjusted EBITDA rose to $1.9 billion with a consolidated EBITDA margin of 9.8%.
- Net income for the quarter was $329 million, and dividends were announced at $0.37 per share.
- Poultry and pork operations, particularly Pilgrim's, Seara, and JBS U.S. pork, contributed 75% of the EBITDA.
- Investments in new protein types and expansion, including a salmon farm in Tasmania and a new Seara facility in Saudi Arabia, were highlighted.
- The company anticipates a net debt to EBITDA ratio below 2.5 times by the end of the year and aims for credit rating upgrades next year.
Company Outlook
- JBS is confident in its long-term strategy, focusing on geographic and multi-protein diversification.
- The company plans to continue investing in new protein types and expects stable grain prices and balanced supply and demand.
Bearish Highlights
- Profitability was impacted by a challenging cattle cycle and increased live cattle prices.
Bullish Highlights
- JBS Australia and JBS USA pork saw revenue growth and improved profitability.
- Pilgrim's Pride (NASDAQ:PPC) reported the highest quarterly EBITDA in its history.
- Strong domestic demand in Brazil and investments in new products align with consumer preferences.
Misses
- There were no specific misses mentioned in the summary provided.
Q&A Highlights
- JBS management discussed their healthy cash balance and $808 million dividend payment without the need to raise additional funds.
- The company is working on the NYSE listing process and expects it to continue for some time.
- Management expressed optimism about the US beef cycle, predicting a change in cattle supply by 2026.
JBS S.A. has demonstrated a strong performance in the second quarter of 2024, with its diversification strategy paying off in the form of increased net revenue and profitability across several operations. The company's investment in innovation and expansion, including a new Seara facility in Saudi Arabia and a salmon farm in Tasmania, underscores its commitment to long-term growth. Despite challenges in the cattle cycle, JBS has maintained a positive outlook, supported by stable grain prices and a balanced market. The company's financial discipline is evident in its reduced leverage ratio and the expectation for further deleveraging, as well as its strategy to enhance shareholder value through dividends. JBS's management remains focused on the company's growth and operational efficiency, rather than on competitor tactics, as they work towards a NYSE listing and anticipate an improvement in the US beef cycle in the coming years.
InvestingPro Insights
JBS S.A. (JBSAY) has shown resilience and strategic growth in the second quarter of 2024, as reflected by its impressive financial results. Investors following JBSAY will find additional insights through InvestingPro that further illuminate the company's current standing and future potential:
InvestingPro Data indicates a market capitalization of $14.15 billion, underscoring the company's substantial presence in the Food Products industry. The Price/Earnings (P/E) Ratio stands at 20.5, which, when compared to the adjusted P/E ratio of the last twelve months as of Q2 2024 at 34.02, suggests a market perception of future earnings growth. Moreover, the company's revenue growth for the same period was 2.62%, a steady increase that aligns with JBS's reported net revenue uptick.
An InvestingPro Tip highlights the company's expected net income growth this year, aligning with the positive net income figures reported for Q2 2024. This projected growth is a testament to the company's robust business model and operational efficiency. Additionally, JBSAY's significant return over the last week, with a 20.36% price total return, reflects strong investor confidence and market performance, complementing the bullish highlights of the company's quarterly achievements.
Investors seeking more comprehensive analysis will find that InvestingPro offers a total of 16 InvestingPro Tips for JBSAY, providing a deeper dive into the company's financial health and market performance. This includes insights into dividends, where JBSAY has maintained dividend payments for 11 consecutive years, with a notable dividend yield of 5.52% as of the latest data, reinforcing the company's commitment to shareholder returns.
By integrating these insights, investors can gain a more nuanced understanding of JBS S.A.'s market position and future prospects, further enriching the article's analysis of the company's successful quarter and strategic investments.
Full transcript - JBS SA (OTC:JBSAY) Q2 2024:
Operator: Good morning and welcome to JBS S.A. and JBS USA Second Quarter of 2024 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded. Any statements eventually made during this conference call in connection with the company's business outlook, projections, operating and financial targets, and potential growth should be understood as merely forecasts based on the company's management expectations in relation to the future of JBS. Such expectations are highly dependent on market conditions, on Brazil overall economic performance, and on industry and international market behavior and therefore, are subject to change. Present with us today, Gilberto Tomazoni, Global CEO of JBS; Guilherme Cavalcanti, Global CFO of JBS; Wesley Batista Filho, CEO of JBS USA; and Christiane Assis, Investor Relations Director. Now, I will turn the conference over to Gilberto Tomazoni, Global CEO of JBS. Mr. Tomazoni, you may begin your presentation.
Gilberto Tomazoni: Good morning everyone. Thank you very much for participating in our results teleconference. We had a strong second quarter further showcasing the strength of our diversification strategy and indicating that the most promising outlook for 2024 is becoming a reality. We recorded net revenue of $19.3 billion with a consolidated EBITDA margin of 9.8% for the period, adding 5% points compared to the second quarter of 2023. Adjusted EBITDA rose to $1.9 billion, with a positive free cash flow of $1.1 billion and net income of $329 million in the period. Following a strong cash flow generation and the outlook for further deleverage, the company announced yesterday after market closed the distribution of dividends of $0.37 per share. Our global multi-protein platform has enabled JBS to mitigate the natural cycles in our sector and maintain healthy cash generation. As a testament of this stretch, 75% of our EBITDA this quarter comes from our poultry and pork operations, predominantly Pilgrim's, Seara and JBS U.S. pork. Additionally, both Australia and JBS Brazil also delivered a strong performance. Our poultry and pork business have benefited from lower grain pricing and a better balance sheet between supply and demand, thanks to active portfolio management and the operational improvement implemented. U.S. pork's margin increased from 4.4% to 11.1% year-over-year. With strong results in the United States, Mexico, and Europe, Pilgrim's exceed market expectation, recording the best EBITDA results in its history for a quarter, $782.8 million in the second quarter of 2024 compared to $375.3 million in the second quarter 2023, with a margin of 17.2%. A clear focus on operational excellence, disciplined execution, and key customer strategy, as well as its diversified portfolio allowed Pilgrim's to efficiently navigate the positive market momentum. At Seara, the process of operational improvements continues to progress rapidly, now incorporating enhancements in commercial process, including scientific management of pricing, product mix, channels, and more. With our EBITDA margin at 17.4%, Seara confirms the optimistic expectation we have been indicating in the previous quarters. The investment we have made over the past few years, including the recent opening of two new facilities for chicken value-added products and hot dogs in Rolândia, Paraná, and the expansion in our Dorado plant in Mato Grosso do Sul all in Brazil are starting to bear fruits. The strength of our diversification puts JBS in a unique position in the industry. While the market environment in the United States remain challenging, our beef business, Brazil and Australia are benefiting from favorable cycles in both countries. In Australia, the positive environment reflected a significant increase in margin in the second quarter of 2024 compared to the same period last year. In Brazil, the outlook for the beef business is promising, driven by significant growth in cattle processing volumes, domestic demand increased and improved export profitability. Our global diversification strategy is driven by investment innovation and building a strong brand, creating a more resilient and higher value-added portfolio. We recently announced an investment of AUD110 million to expand our salmon farm at Huon Whale Point facility in Tasmania. We are also finishing construction of new Seara facility in Jeddah, Saudi Arabia, which will multiply for four company chicken value-added production capacity in the country. The numbers from the second quarter reinforced this solid of our financial management. Our leverage ratio decreased from 3.66 times in U.S. dollar in the first quarter of 2024 to 2.707 times in the second quarter, six months higher of this period. Our results reaffirm our confidence in JBS long-term strategy. We are a company with a solid and proven management model enable us to invest in new types of protein and replicating the success we have had in beef, chicken, pork, and value-added products. The stats [ph] of this increasingly diversified platform, combined with our commitment to excellence and innovation, will allow us to continue to generate value for all our stakeholders and create opportunities for our more than 270,000 team members around the world. Thank you again for your participation in this results call. And now, I will pass the floor to Guilherme, who will detail our numbers. Guilherme, please.
Guilherme Cavalcanti: Thank you, Tomazoni. Let's now move on to the operation and financial highlights on the second quarter of 2024, starting on Slide 13, please. Net revenue for the second quarter was $19.3 billion. Adjusted EBITDA totaled $1.9 billion and represents a margin of 9.8% in the quarter. Free cash flow was $1.1 billion in the second quarter of 2024. Net profit was $329 million in the quarter, but adding back non-recurring effects, adjusted net profit would be $470 million. Moving on to this next slide. Operating cash flow in the quarter was $1.8 billion. Free cash flow for the quarter was $1.1 billion, more than offsetting the consumption of $625 million in the first quarter and generating $431 million in cash in the year-to-date. This strong free cash flow generation is explained by the improvement in results from all of our business units, except JBS beef North America. CapEx expenditure in the quarter was approximately $346 million, 63% of which was maintenance CapEx. The total amount is 12% lower than the second quarter 2023, and this is in line with our estimate for the year of $1.3 billion. Moving on to the Slide 16. Net debt in the second quarter 2024 ended at $14.8 billion, a reduction of $1.1 billion compared to the previous quarter, reflecting the generation of free cash flow in the quarter. Leveraging dollars came down in just one quarter from 3.66 times to 2.77 times for the second quarter. In the third quarter 2023, leverage was 4.87 times. The rapid decline is due to the expansion of EBITDA as well as a decrease of debt given the generation of free cash flow despite having executed an expansion CapEx of $434 million in the next -- in the last nine months. For the third quarter, not considering guidance, leverage will possibly continue on an accelerated downward path, possibly even falling below 2.5 times, anticipating our initial deleveraging estimates by almost six months. Therefore, considering that the third quarter and fourth quarter are generally cash generators, it would be reasonable to think of our leverage ratio approximately close to 2 times by the end of the year, already considering the payment of interim dividends in the amount of $808 million, equivalent to $0.30 per share announced yesterday. The strong free cash flow generation, even though our largest business units in terms of net revenue, JBS beef North America is facing a challenging scenario, demonstrates the strength of our unique platform. Therefore, we are optimistic that the geographic and multi-protein diversification will continue to provide near-term growth and returns to our shareholders. From 2019 to 2023, JBS generated more than $10 billion in free cash flow before expansion tax. These resources were applied in a balanced way in growth and shareholder return being $4 billion in organic growth, $3.2 billion in acquisitions, $3 billion in dividends, and $3 billion in share buybacks. Net debt increased by around $3 billion, but financial expenses remaining constant due to the liability management work in which we took advantage of favorable moments to issue new debt with more attractive rates. This year, we have already generated $431 million in free cash flow. And it's worth noting that from the beginning of 2019, to-date, the company has already provided an average total shareholder return of 27% per annum in reals and 19% per annum in dollar. In the same period, return on equity and return on invested capital was 19% and 17%, respectively, even with the high spread of treasury on our cost of debt. In -- for example, in 2019, our spread of our treasury was around 400 basis points. Currently, our spread of our treasury is around 160 basis points for a 10-year period. A large part of this improvement were generating significant returns from our bondholders occurred after we opened investment-grade rating from credit rating agencies and when we registered the notes with the SEC. Finally, we would like to thank investors for voting for JBS in the institutional investor ranking. We were awarded first place in several categories and elected the most honored company in the food and beverage sector in Latin America. So, I will briefly go to the business units. Starting with Seara on Slide 17. Net revenue growth was 6.7% year-over-year. Profitability grew by a significant 13.3 percentage points, reaching 17.4% EBITDA margin. This result is a consequence of the various operational actions implemented throughout the value chain, which resulted in better operational indicators, combined with a lower grade cost and expansion of value-added portfolio. Seara continues to revisit its strategy of increasing consumer preference through product quality, innovation, execution, and brand strength, achieving growth in indexes such as penetration and repurchase. Moving now to Slide 18, JBS Brazil reported net revenue of 5% higher than the second quarter 2013, driven by higher volume sold. This result is due to the strong demand in both the domestic and international markets. In addition to the favorable cattle cycle resulted in greater availability for slaughter. Thus, the EBITDA margin reached 7.6% and increasing 2.8 percentage points. Moving to the Slide 19 and from now on speaking in dollars in U.S. GAAP. JBS beef North America's net revenue grew 3% in the quarter as a result of the increased volumes sold. However, profitability was negatively impacted by the challenging cattle cycle, which saw a 5% increase in the price of live cattle, while wholesale price of beef remained stable. On Slide 20, we have JBS Australia. For the quarter, revenue growth in relation to the previous year as a result of the higher volumes sold. The growth in profitability reflects the greater availability of cattle in the market, given a more favorable cattle cycle and efficiency gains in several business units in Australia. Turning now to JBS USA pork. Net revenue for the quarter was 22% higher than the second quarter 2023 due to the increase in average price in the period. In the domestic market, strong demand was the result of the distribution [ph] effect of beef consumption for pork and the increase in consumption during the breeding season. Furthermore, profitability was a consequence of the lower cost of grains, expansion of value-added pork form, and consistency in commercial and operational execution. Pilgirm's Pride, as highlighted on Slide 22 reported an increase in net revenue of 6% in the second quarter compared to the second quarter last year. During the quarter, PPC remained disciplined in executing in this strategy and continue to grow relationships with customers, further improving service levels as market fundamentals became increasingly attractive. Therefore, Pilgrim's reported the highest quarterly EBITDA in the history. At this time, I would like to open up question-and-answer session.
Operator: Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Ben Theurer with Barclays (LON:BARC). Please go ahead.
Ben Theurer: Yes. Good morning Tomazoni and Gui, congrats on those outstanding results in the second quarter. Just a few quick ones. So, first of all, Seara, obviously, was a very strong quarter in the second quarter. And I remember just about little over a year ago, you had a couple of like internal issues. So clearly, going within six quarters from a, call it, a 1% to a 17% margin is a strong improvement. Could you help us understand how much of that improvement was really of the operating efficiencies that you fixed versus what was just market tailwinds, lower grain costs, et cetera? That would be like my first question. And it kind of relates into how this continues into the third quarter and if you're expecting any impact from the Newcastle disease outbreak and the restrictions?
Gilberto Tomazoni: Hi Ben, thank you for your question. You know that we made a lot of improvements inside. We start in the farms to improve our agriculture and production operations in the farms than in the factories, how the productivity, mix management, and now we -- now one month ago, we start to add our improvements and the commercially, where it is scientific price [ph] management, channels and mix management. This will be -- had more productivity in our commercial area. We are expecting if we keep all of the variable consent that Seara will be in -- continuously improve the productivity and the results. If you ask me how will be the impact of this improvement, of course, this improvement was by operations improvement because of the price of the grain and the both -- I think both are significant important for them. I will say to you, is half of this was improvements and was the operational and the other part was the cost of the grains that impact our both chicken and pork. But there is a combined benefit because if you are improving the operation in the farms, for example, fifth conversion, that may enhance your productivity in terms of grain that this is not -- it's difficult to say exactly what, but I will say to you, it's a half-on-half.
Ben Theurer: Okay, perfect. And then just on the third quarter outlook, July and the applications still with the export restrictions because of Newcastle disease, are you seeing any impact here within Seara?
Gilberto Tomazoni: I think the impact will be in the third quarter, of course, was impact, but it's not significant impact because I think Brazilian government act very quickly, and to attack this situation, I think the -- now the government has declared decree from Newcastle, and we remain some of countries, China -- at least China and Saudi Arabia, not remember the other one. It's just close -- [indiscernible] others are closures. Just the focus, 10 kilometers, around the focus. And of course, there is an impact, but it's not -- I would say to you, it's not significant in our results. We are able to manage on the moment that they close. We manage because as we have many plants approved, for example for Japan, we move our production from one plant in [indiscernible] to other plants in part of the Brazil. That's -- I think we were able to manage very efficiently in the situation.
Ben Theurer: Okay. And then pork in the U.S., just help us understand what helped you drive to a 12.5% margin, which is not only above like your kind of like target range or a steady range of 8% to 10%, it also looked like significantly stronger on a sequential basis despite conditions in the market, not looking as strong. So, maybe help us understand what drove that significant margin improvement sequentially and on a year-over-year basis in U.S. pork?
Wesley Batista Filho: Hey Ben, so a few things. Obviously, there is the market conditions. We have grains being at a historical low here in the short -- in the last few years. You have -- obviously, beef, been -- high-priced pork becomes a good option and that supports the demand for pork. But I would say that all of those things obviously really help. But I think there is a couple of things that are special about this quarter. Number one, I think we've just been performing very well in our pork division. It's one of our most consistent divisions and always delivers good results. We have very good assets that have been very well invested, and I think they're very efficient, and it's a competitive advantage we have in the market. The other thing, too, we've been investing a lot in this business, Ben, with a more prepared foods business. The prepared -- to add value to our pork raw material, we've built a couple of greenfield plants here in the U.S. with expanded plants that we currently have. And the size of our prepared business has been growing a lot, and it adds value on this overall business unit. We had two plants that in the last quarters were in ramp-up mode and those plants are -- mostly, one of them is fully mature. The other one is well advanced into maturity, and they are adding a lot of value to our pork business. Going forward, we expect that double-digit margins is where we see the pork business going forward.
Ben Theurer: Thanks for that Wesley.
Operator: Our next question comes from Ben Mayhew with BMO (TSX:BMO). Please go ahead. Ben Mayhew, you may proceed.
Ben Mayhew: Sorry, guys, I was on mute. Thanks for taking the question. I was just wondering if you could talk to the strength of the domestic Brazil demand for protein? And how JBS is meeting the moment in providing consumers with both premium and value products? Also, do you expect strength in domestic demand to continue to 2025? And what are the major factors you're looking at? Thanks.
Gilberto Tomazoni: Hi Ben, thank you for the question. We are very optimistic about the internal demand in Brazil. For example, I'll give you an example. I think example better than just to speak about theories. With our beef operation in Brazil, we have processed 18% compared to the -- this -- the first semester, 18% more in there of cattles. And the domestic -- and we sell more of this growth in domestic in the next quarter. Why? Because we reduce the cost of the cattles, reduce the cost of the meat, the elasticity of the consumption increased a lot. We grow our business and -- because the per capita consumption increased a lot in Brazil. And the same was not different in chicken and value-added product. We see that the Brazilian domestic demand is really good and we are seeing that continue. We are investing on that. It's not -- we just not to invest in the same product that, for example, when we talk about Seara. We innovate because we, as you know, we have invested in new capacity from value-added. But we entered in the market, not at the same product that we were before. We went with new products in order to create a new demand for our products and not just compete in terms of price and volume, but compete in the preference of the consumers. My answer to you, we are positive on that.
Ben Mayhew: Great. And if I could just ask one more question. Can you just talk to the impact of lower grain costs and how they're JBS' benefiting margins across the portfolio? I know you mentioned Seara, we heard the answer there. But how much do you actually pass through versus not of your lower grain costs? And what is your outlook for grain costs headed into 2025, could they even get more favorable? Thank you.
Gilberto Tomazoni: Ben, you know that the most important in this equation is the balance between demand and offer. If today, we have balanced demand and offering. In chicken, and it's because we have restrictions in terms of availability of chicken because of genetic and because of actability, as I think as [Indiscernible] have commented when they released the results of Pilgrim's. And this is one fact. The other fact is we see good crops now in front of us. We -- the weather was, I think it's -- in the north was perfect. I think we see now from now on, a stability in terms of the price of the grains. And if we are balanced in the demand -- in the offer and the demand, I believe that we -- JBS will keep doing in terms of business the same kind of results we have seen now. Of course, we need to be constant that this second quarter is the best quarter, for example for Pilgrim's, the second and third quarter is not better as the second quarter. That -- this is -- the seasonality will be -- appears as well.
Ben Mayhew: Great. Thank you.
Operator: Our next question comes from Orges Asllani with Barclays. Please go ahead.
Orges Asllani: Hi, thank you for taking our question. This is Orges asking on behalf of Priya. Starting on the debt side, how are you thinking about the debt structure given where leverage ended this quarter end? Do you see the need for further pay down or any liability management?
Gilberto Tomazoni: Hi, thanks for the question. So, we -- now generally before election periods, markets tends to be more volatile. And we're seeing more volatility in treasury markets as well. So, given that we are not needing cash, I think we ended the quarter with a healthy cash balance. We just announced payments of $808 million of dividends, which again, we have the cash, the proceeds for that already. So, I don't need to raise additional -- poach the market for the payment of this dividend. So, we don't see any -- and as I said, we have no need to go to the market. So, -- and it depends on, again, the evolution of the cash till the end of the year. We see if we may pay more dividends -- sorry pay more debt as we did in the first semester when we paid $500 million in bonds at JBS and paid more bonds in BBC. But again, we will be monitoring the markets and depending on the bank. Generally, we generate free cash flow in the third and fourth quarter. So, if we think -- after we're doing our budgeting in the second semester. If we have more visibility of next year cash generation, we may think about paying down debt again. But they do depend on the opportunities and what we see now in the second semester.
Orges Asllani: Thank you. And then on the dividend side, given the interim dividend that you just announced, how much total dividend should we expect to be paid out this year? And do you think this dividend announcement might have an impact on the timing for the outlook changed to stable from the rating agencies?
Guilherme Cavalcanti: No. Again, we just announced this dividend because we are confident that even with this dividend, I think we'll be able to have the negative outlook withdraw from our rating. And why is that? Because for the third quarter, we are expecting to end below 2.5 times. The dividend payments will be in October. But again, as last year, third quarter last year, we had $1.1 billion in EBITDA. In the fourth quarter last year, we have $1 billion of EBITDA. This quarter that we just presented, we have $1.9 billion EBITDA, so we will have EBITDA expansion until the end of the year. And we presented a good cash conversion this quarter. And third quarter and fourth quarter are generally cash generators quarters. So, because of the EBITDA expansion and the free cash flow generation, even with this dividend payment, we expect to finish the year close to 2 times net debt to EBITDA. So, I think with this perspective, I think rating agencies at some point will take out the negative outlook and managing to keep low leverage, maybe -- and we'll target to have upgrades maybe next year. And the level of dividends that again, it depends on our free cash flow perspective. We announced this dividend because, as I mentioned, we generated in only three months, $1.1 billion in free cash flow. So, given that we have no pressure in debt payments and we see more free cash flow going forward, we were very comfortable with this dividend. The level of dividends, again, we would like to have it more stable as possible. We don't have, again, figure out yet. But if you look at the last years, for example, 2021, we paid $900 million in dividends. 2022, we paid $873 million in dividends. In 2023, we paid -- last dividend, we paid $448 million because it was a challenging year. So, this year, now we are back on our average. So, we will be paying this $808 million. So, again, it all depends on how we perform going forward. But I think this level of dividends is very profitable.
Orges Asllani: Great. Thank you so much.
Operator: Our next question comes from Carlos Laboy with HSBC. Please go ahead. Excuse me Carlos, your microphone is on mute.
Carlos Laboy: Sorry, good morning everyone. Guilherme, can you please give us an update on the NYSE listing process, where it stands? And is it going slower than you expected? Or is it tracking along fine?
Guilherme Cavalcanti: Hi Carlos. No, again, I think it's a regular process. Remember, we were now in a period of vacation, right, summertime in U.S. So, a lot of people -- the expectations for everything gets to a lower base. But again, the processes where we are -- easily see that we're doing the filings, getting the comments on the memorandums and answering them, the new files. I think the process is normal. But again, it's out of our control. So -- but again, at some point, and then if you compare, we've been in there, of course, at some point, the questions will be decreasing. All the comments -- it will be difficult to have any more comments besides we are adding the quarterly figures. So, yes, unfortunately, it's not in our control, but it's a regular process, and we'll be on this maybe a few time rounds before we get the registration greenlight to be able to ask -- to call the general assembly.
Carlos Laboy: That’s all. Thank you again.
Operator: Our next question comes from Carla Casella with JPMorgan (NYSE:JPM). Please go ahead.
Carla Casella: Hi, most of my questions have been answered. But can you just give a sense for how long you think until we see the bottom of the beef cycle in the U.S.?
Wesley Batista Filho: Hey Carla, we are pretty optimistic about what the beginning of the retention in the U.S. We see cattle slaughter coming down 15% year-over-year. We think that, that's a huge sign of the retention starting. The moment that's very important for us to watch out for is going to be this fall, and we're going to see what happens. But I think that 2025 will be a similar year to 2024 and we're probably going to see the -- if nothing changes weather-wise and all of that, we probably could see somewhere in 2026 things changing in regarding the cattle supply.
Carla Casella: Okay. And then on the pork side, are you seeing any difference in Smithfield's tactics from a competitive standpoint, given that they're talking about listing in the U.S. as well?
Wesley Batista Filho: I don't know what to comment about Smithfield and listing, but I'm not -- I don't think I have anything relevant to tell you about that. Our business is still pretty much the same and we're focused on all the things that we -- on our business, not so much about what our competitors are doing, especially something related to listing.
Carla Casella: Okay. Thank you.
Operator: Ladies and gentlemen, there will be no further questions. I would like to pass the floor to Mr. Gilberto Tomazoni. Please go ahead.
Gilberto Tomazoni: Thank you all again for your participation for the questions for this result of call. And I would like to extend my thank you for all our team members for the dedication and commitment to deliver these great results. Thank you all of you.
Operator: This is the end of the conference call held by JBS. Thank you very much for your participation and have a nice day.
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