March 25, 2014

Marfrig reports loss of US$35.39 million in Q4 2013

Marfrig Global Foods, the second largest beef processor in Brazil, reports a net loss of US$35.39 million in Q4 2013, coming below market expectations, down 57% from Q3 2013.

The company did not report a comparison with the same period last year.          

Adjusted EBITDA (earnings before interest, depreciation, amortization and taxes) was US$180.14 million, up 12.6% from Q3. In 2012 Q4, the company had reported EBITDA of US$173.06 million.

Total net revenue totalled US$2.12 billion, up 0.7% from Q3.

The loss of US$35.39 million came below market expectations. The average forecast of five financial institutions (BTG Pactual, Espírito Santo Investment Bank, Itaú BBA, Morgan Stanley and Votorantim Brokerage) indicated that the food company will have a net loss of US$38.71 million in Q4 2013.

For cash generation measured by EBITDA, experts from the five financial institutions expected an amount of US$166.37 million, 3.9% lower than the figure of US$173.06 million in 2012 Q4. The company reported adjusted EBITDA of US$180.14 million in 2013 Q4, also higher than expected.

The adjusted EBITDA margin was 8.5% in Q4 2013, above expectations of 7.7% by analysts.

Marfrig also reported that it is studying alternatives to its external operations with its brands Moy Park, present in North Ireland, and Keystone Foods, present in Asia, Oceania and the United States. It is exploring and analysing the possibility of conducting the IPO of its foreign subsidiaries. The purpose of these operations would be to inject additional capital for growth in Europe and Asia, using part of the funds for further debt reduction.