Marfrig Reports Net Revenue up 50 Per Cent17 August 2011
BRAZIL - For the second quarter, Marfrig reports its net revenue at 5.3 billion real (BRR), an increase of 49.6 per cent on the same period of 2010.
Marfrig Alimentos S.A., a global food company, has reported earnings for the second quarter ended 30 June 2011.
Marfrig's export revenues at its Beef Brazil and Seara divisions scored market share gains during the second quarter despite the challenging global backdrop of higher raw material prices (mostly grains and cattle) and a 2.1 per cent appreciation in the average Brazilian real/US dollar exchange rate for the period. The capture of synergy gains at Seara and solid performance at Keystone Foods, Europe and Beef Brazil partially offset pressures across the industry exerted by the stronger local currency and higher raw material prices.
Among the key highlights of the report are that net revenue was BRR5.32 billion, up 49.6 per cent from BRR3.56 billion in 2Q10 and 1.3 per cent from BRR5.25 billion in 1Q11.
Beef exports accounted for 23.7 per cent of Brazil's total beef exports in 2Q11, versus 20.7 per cent in 1Q11 and 15.7 per cent in 2Q10. Poultry exports also posted a strong performance, growing to account for 23.1 per cent of Brazil's total poultry exports in 2Q11, versus 22.7 per cent in 1Q11 and 19.9 per cent in 2Q10(1).
Gross income for the period was BRR712.3 million (13.4 per cent gross margin), up 19.0 per cent from BRR598.3 million (16.8 per cent gross margin) in 2Q10. EBITDA was BRR277.8 million, up 9.7 per cent from BRR253.2 million in 2Q10 but down 17.7 per cent from BRR337.3 million in 1Q11. Cash flow from operations was positive at BRR109.4 million in the period.
Expanded product lines with new launches of value-added products helped gain market share, and opportunities were captured worldwide to increase cross-selling opportunities by drawing on the global distribution platform established by the Group's geographic diversification.
The company says its improved financial result was achieved by focusing on sustainable results, controlling our working capital needs and enhancing free cash flow. Debt management was optimised in order to strengthen the balance sheet and extend the debt profile, and short-term debt as a percentage of total debt declined to 22.7 per cent from 29.6 per cent in 1Q11.
Marcos Molina dos Santos, CEO and Chairman, commented: "The second quarter continued to pose the challenging environment seen since early 2011, with a weaker US dollar and high grain and livestock prices set against the backdrop of the financial scenario in Europe and the United States, which continue to show signs of economic stagnation.
"Despite this adverse operational environment, Marfrig worked to improve its cash flow by reducing its use of working capital, maintaining a high cash balance and improving its debt profile, with the percentage of short-term debt falling to 22.7 per cent, from 29.6 per cent in the previous quarter. We continue to identify synergies and improvements in our operations, working to add more value and prioritise the most profitable channels.
"While we expect the current volatile operating environment to continue into the second half of the year, we also expect to benefit from our financial and operational discipline in order to meet our goals of achieving growing and sustainable margins and creating value for our shareholders," said Mr Molina dos Santos.
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