Domestic demand to fuel higher profit margins for Brasil Foods

Brasil Foods SA, the world's biggest poultry exporter, said growing Brazilian demand will help it boost margins further this year after it posted a profit in the fourth quarter.

Domestic demand for the company's food products will rise at a faster pace than international demand, chief financial officer Leopoldo Saboya said. The company's domestic sales volumes will likely climb as much as 10% in 2010, topping the 3-5% increase expected in international markets, he said.

''I'm optimistic about the domestic market, while international demand will experience a slow and gradual recovery,'' Saboya said. ''We expect growing margins for this year as prices recover in domestic and international markets.''

Earlier, Brasil Foods reported that it had fourth-quarter net income of BRL6 million (US$3.34 million), or 1 centavo a share. That compares with a loss of BRL20 million (US$11.13 million), or 10 centavos, in the year-earlier period, according to the company. Analysts had forecast profit of 25 centavos a share on an adjusted basis, the average of seven estimates in a survey.

Meanwhile, Brasil Foods said in its earnings statement that the year-ago loss for the combined companies was BRL1.33 billion. The company's shares fell 70 centavos, or 1.6%, to BRL44.10 (US$24.55) in Sao Paulo trading on February 26.