February 28, 2007

Perdigao gross profit down 7.9 percent on-year in 2006
 

Press release
 

Reduced demand for chicken meat amid bird flu concerns and Russia's ban on Brazilian pork exports following foot-and-mouth disease cases in Brazil last year significantly affected Perdigao's 2006 sales. Appreciation of the Real against the US dollar, reduced imports of specialty products by some Latin American countries and delay in re-establishing normal trade relations with some countries such as Japan also impacted company earnings.

In response to these unfavourable conditions on the international front, Perdigao raised its focus on the Brazilian market through continued diversification of the product mix with an emphasis on high value-added products.

Gross domestic sales performed well, rising 20.1 percent from fiscal year 2005 to register over 3.6 billion real (about US$1.682 billion). Consequently, gross sales rose by 4 percent to reach 6.1 billion real.

In particular, Perdigao's meat business posted an 8 and 12.4 percent increase in revenue and sales volumes respectively in 2006, with meat export volume almost unchanged compared with 2005 at 695,500 tonnes.

However, overall export revenue dropped 13.3 percent on-year to 2.5 billion real, while gross profits declined 7.9 percent to 1.3 billion real.

On a positive note, average costs fell 7.3 percent last year, reducing the impact of unfavourable international market conditions on export revenues.