Brazil meatpacker Marfrig back in black

Net revenue up 3.8% year-on-year
calendar icon 16 May 2024
clock icon 2 minute read

Brazilian beef producer Marfrig on Wednesday posted a 62.6 million reais ($12.19 million) net profit in the first quarter, reversing a 634 million reais loss from a year earlier, with revenues rising in all divisions and financial expenses falling, reported Reuters

Marfrig reported net revenue, excluding assets in South America it has agreed to sell, of 30.4 billion reais ($5.9 billion), up 3.8% year-on-year, driven by increases in all its divisions - South America, North America and BRF.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) almost doubled to 2.65 billion reais, with EBITDA margins rising more than 4 percentage points to 8.7%.

That was lower than the 2.87 billion reais expected by Santander analysts. However, it was not immediately clear how comparable the numbers were with other forecasts due to adjustments in reporting after Marfrig's recent acquisitions.

"The significant (EBITDA) growth is the result of robust performance by BRF, which compensated the profitability of the North America division," it said in the earnings statement.

Financial expenses were almost 30% lower, which also helped Marfrig to swing to the black in the quarter.

BRF, a Brazilian poultry producer of which Marfrig became the controlling shareholder last year, released its results earlier this month.

Marfrig said its margins in North America, where it operates through the National Beef brand, fell 1.9 percentage point to 2.1%, hit by higher cattle prices amid strong demand and lower supply.

Still, the company said its margins were "above market average".

"Cattle offer should hit a low in 2027," Chief of the North America division Tim Klein told reporters, adding costs are expected to grow more in the region until then.

Marfrig's head for South America Rui Mendonca said the company has not seen material impacts on its operations in Brazil's southernmost state of Rio Grande do Sul, which has been hit by deadly floods. The firm owns four beef plants in the state.

($1 = 5.1361 reais)

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