BRF Profit Soars

BRAZIL - Brazilian meat, poultry and dairy processing giant Brasil Foods (BRF) ended the first quarter of 2013 with net revenue of R$ 7.2 billion, increase of 13.8 per cent over the same period of 2012 but net income reached grew by 134 per cent, reaching R$ 359 million.
calendar icon 30 April 2013
clock icon 3 minute read

Adjusted EBITDA reached R$ 852.5 million, which corresponds to growth of 60.2 per cent and amounts to 11.8 per cent of net sales of the company.

All operations in the company contributed to this performance, although the domestic market accounted for 78.5 per cent of operating income for the quarter.

Gross profit reached R$ 1.7 billion, an increase of 26.3 per cent, which was provided by efficient management of costs, despite the pressures that continued to impact operations during the period.

The positive results met the company's expectations regarding for a more balanced market.

The growth and profitability recorded in the quarter, compared to the previous financial year, were helped by the brand positioning, innovation and diversification laid down in the company’s portfolio during 2012.

The domestic market revenue reached R$ 3.1 billion, an increase of 4.2 per cent compared to the first quarter last year.

Average prices increased by 12.6 per cent, compared to the average costs, which increased by 7.4 per cent, as a result of inflation.

Sales to foreign markets in the first quarter of 2013 were R$ 3.1 billion, up 31 per cent compared to the previous year.

With the shipment of 602.1 tons of product in the period, BRF increased its share of exports
compared to other Brazilian exporters, both in relation to poultry meat and pig meat.

In the case of poultry, the increase was three percentage points compared to the first quarter of 2012 reaching 47 per cent of export share.

In the case of pork, there was a gain of 4.2 per cent, reaching 46.4 per cent share in exports.

The company said the results on the international market were affected by some factors in the period, including port and logistical problems caused by excessive rain in the south and bottlenecks in the port of Santos, because of the high volumes of grain scheduled to be shipped abroad.

In the dairy sector, revenues reached R$ 647.6 million – the result of the adjustment the business strategy to increase profitability through a mix of higher value-added products and a reduced dependence on UHT milk.

The operating income was R$ 28.8 million, an operating margin of 4.4 per cent.

The company said the quarter was challenging for the food services market.

The upward trend in the consumption of meals outside the home, which marked recent
years, was shaken by a fall in consumer confidence, high inflation of food and beverages and higher debt in the first months of the year.

Despite the adverse scenario, the sector continued to focus on improving the level of
service from the processor, with 3.5 per cent growth in revenue, to R$ 365 million.

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