Brazil’s JBS SA, the world’s largest meat producer reported last Friday that quarterly profit plunged 47.1%, with results still beating analysts’ estimates as higher revenues helped offset shrinking margins in its U.S. beef division.

The company posted a third-quarter net profit of 4.01 billion reais (US$ 745.35 million), while analysts polled by Refinitiv had expected it to land at 3.75 billion reais.

Net revenue grew 6.8% to 98.9 billion reais, mainly driven by 22.3% sales growth at its brand Seara and its Australian unit, that reported growth of 19.5%.

JBS Beef North America, usually the firm’s cash cow, had revenue of 29.15 billion reais, down 4.8% from the previous year.

“As the U.S. beef business margin normalizes, we observe a strengthening of the segment in the Brazilian and Australian markets,” said JBS chief executive Gilberto Tomazoni.

The beef unit in North America reported adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 2.52 billion reais, a sharp 67.5% decline from a year ago. The unit’s operational profitability, measured by its EBITDA margin, fell 16.7 percentage points to 8.7%.

JBS exports particularly from Mercosur members, where the Brazilian giant has abattoirs and strong market positions has seen a decline in demand and prices. Some analysts blame the situation to the heavy stocks built by importers in Beijing in anticipation of the Chinese New Year celebrations.

However other analysts fear it is the beginning of difficult times since China insists with tight lockdown policies, contracting consumption, but even more concerning the Asian giant economy is rapidly losing steam.

This has already reflected in cattle prices in all Mercosur country members, except Argentina were price distortions, influenced by government policies are the norm.