No Immediate Impact on JBS' Ratings from Cyberattack

 

Source: Fitch Ratings

02 Jun, 2021

 

New York-02 June 2021: Fitch Ratings does not anticipate any immediate effect on JBS S.A.'s (JBS) ratings from cyberattacks that disrupted the company's operations in Australia and North America this week. JBS announced on June 1, 2021 that its subsidiaries JBS USA and Pilgrim's Pride Corporation have made significant progress in resolving the cyberattacks and that it expects most of its plants to be operational shortly. The attacks, which were first reported by the White House, resulted in the shuttering of some of the company's production facilities for several days.

 

Food processors are valuable targets for cyber criminals as they are crucial to food supply chains. As one of the largest protein processors in North America and Australia, JBS has been working closely with the U.S., Australian and Canadian governments to safeguard the food supply. The company stated that its operations in Mexico and the UK have not been impacted and has not reported any disruptions in its Brazilian operations, as the cyberattack was focused on JBS USA; JBS sold over $28 billion of protein products in the U.S. alone in 2020.

 

Fitch views future negative rating implications associated with this event as highly unlikely, provided the company is able to return to normal operations in the near-term Fitch maintains long-term Issuer Default Ratings of 'BB+' for JBS and Pilgrim's Pride with Stable Rating Outlooks. The company's performance has been strong relative to Fitch's expectations. Fitch projects that JBS' net leverage will remain below the 2x net debt/EBITDA upgrade trigger in 2021. Fitch expects the company's sales and EBITDA to grow as a result of the strong performance of U.S. beef operations, strong demand for protein in Asia, the reopening of the foodservice segment, the overall global economic recovery, as well as less operational disruption due to the pandemic compared to 2020.

 

Fitch will continue to monitor events for any potential financial, operational, and reputational effects.

 

Contact:

 

Johnny da Silva

Director

Primary Rating Analyst

+1 212 908 0367

Fitch Ratings, Inc.

Hearst Tower, 300 W. 57th Street

New York, NY 10019

 

Joe Bormann, CFA

Managing Director

Committee Chairperson

+1 312 368 3349

 

Media Relations: Elizabeth Fogerty, New York, Tel: +1 212 908 0526, Email: elizabeth.fogerty@thefitchgroup.com

 

Additional information is available on www.fitchratings.com

 

 

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