Sadia SA, Brazil's second-biggest food company, posted its first net loss in nine years after a currency slump derailed investments in derivatives, according to Bloomberg.

The third-quarter net loss of 777.4 million reais (BRR; $365 million) compares with a profit of BRR188.4 million a year earlier, Concordia, Brazil-based Sadia said in statement to the securities regulator. The company posted BRR1.21 billion in financial expenses, mostly from bad bets on the currency and other wrong-way investments.

Sadia, the first Brazilian exporter to announce currency-related losses last month, fired Chief Financial Officer Adriano Lima Ferreira, saying he exceeded the company's limits for investments in derivatives. The company may need to raise about BRR800 million amid a credit crunch to cover losses, Marcio Kawassaki of Raymond James Financial said in a report on 23 October.

Such a loan would increase Sadia's "financial risk considerably," Mr Kawassaki said.

The Brazilian real has declined 27 percent from a nine-year high on 1 August, surprising exporters that were betting a four- year winning streak would continue.

Sadia is not planning to take new loans and has had no problem meeting obligations with suppliers and lenders, Chairman Luiz Fernando Furlan said.

"We are not seeking loans," Mr Furlan said on a conference call with reporters. "We have sustained a situation of liquidity."

Derivatives Losses

The net loss for the quarter was wider than the BRR720 million forecast by Denise Messer, an analyst at Brascan Corretora in Rio de Janeiro. It was narrower than the BRR885 million estimated by Tomas Awad, an analyst at Itau Corretora in Sao Paulo.

Sadia posted a loss of BRR544.5 million from payments to settle part of its currency derivatives. It said it still had a net exposure to the contracts of BRR2.36 billion at the end of September.

Sadia will continue to settle the problem currency derivatives in coming months, Mr Furlan said. The foodmaker also reported a loss of BRR239.5 million from securities linked to a US bank, without providing details. Chief Financial Officer, Welson Teixeira Jr., said on 26 September that part of the company's financial losses were related to transactions with New York-based Lehman Brothers Holdings Inc., which filed the biggest US bankruptcy on 14 September.

Net sales rose 30 percent from a year earlier to BRR2.79 billion, Sadia said.

Sadia rose 4 centavos, or 1 percent, to BRR4.2 yesterday in Sao Paulo trading. It has plunged 58 percent since reporting the problems with derivatives on 25 September, compared with a 41 percent drop in the Sao Paulo stock exchange's Bovespa index.