Brazil's BRF reports massive first quarter loss

The pork and poultry processor reported $304.9 mln in losses
calendar icon 5 May 2022
clock icon 1 minute read

Brazilian poultry and pork processor BRF SA posted on Wednesday a massive first quarter loss, as inflation weighed on consumer sentiment and raised operating costs in its home market, reported Reuters.

BRF said in a statement it lost 1.5 billion reais ($304.9 million), compared with a 22 million real profit in the same period a year earlier.

The company said its adjusted earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, was 121 million reais, a 90% drop.

The results reflect a challenging operating environment for the company, particularly in Brazil, where inflation reduced consumers' purchasing power at the same time meat companies faced higher fuel and feed prices.

BRF said disappointing food sales in Brazil ended up increasing its inventories, affecting suppliers and logistics. This scenario forced BRF to introduce measures including product promotions, corroding margins in the process.

BRF burned 3.7 billion reais of cash to weather the storm, the earnings statement said.

Aside from headwinds in Brazil, food sales to Asia fell 16.2% to 109,000 tonnes while sales in its home market rose 2.6% to 549,000 tonnes.

In the halal market, where food must be produced according to Muslim dietary requirements, the company increased sales volumes by a healthy 20.5% to 215,000 tonnes.

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