April 30, 2007

 

First-quarter exports rose 22.5 percent for Brazil's Sadia

 

 

Brazilian meatpacker Sadia said exports rose 22.5 percent in the first quarter of 2007 compared to the same period last year thanks to growing chicken and beef demand in emerging market nations.

 

Sales volumes totalled 266,200 tonnes overall compared with 217,300 tonnes in the first quarter of 2006, Sadia said in its quarterly earnings report released late Thursday.

 

The Middle East and new markets in Eurasia and Asia continue to bode well for Sadia exports. The Middle East, Asia and Eurasian markets, mainly Russia, account for 62 percent of Sadia's export revenue.

 

Chicken exports, the main animal protein exported by the company, rose 17.4 percent in the quarter to 207,900 tonnes, with revenues rising 35 percent to 717 million Brazilian reals (US$354.9 million).

 

Sadia is now starting to focus more on the lucrative beef market, with exports rising 87.3 percent to 13,500 tonnes in the first quarter. Revenues from the beef markets were 76.3 million reals, nearly double the same period last year.

 

In spite of a pork and beef ban imposed by Russia because of sanitary concerns, sales volume of pork meat rose 66.7 percent to 21,100 tonnes.

 

Sadia's main export product is whole poultry, accounting for 38 percent of export sales in the first quarter of 2007 compared to 35 percent of sales in the same quarter last year. Poultry cutlets follows with 34 percent of export sales for the quarter compared to 38 percent of sales in the same period last year. Beef accounts for 8 percent of export sales, compared to 5 percent in the same period last year.

 

 

Outlook

 

Sadia said it expects 9 percent to 11 percent growth in total physical sales compared to 2006. Sadia sees local growth ranging between 8 percent to 10 percent and export growth between 10 percent and 12 percent, due to the demand for poultry in Europe and the Middle East following a general decline of bird flu fears among consumers.

 

After market hours Thursday, Sadia reported first quarter net profit of 96.2 million Brazilian reals (US$47.4 million), up 43.6 percent from 66.9 million reals in the year ago period.

 

"With the ongoing efforts towards a firm and sustainable growth, we succeeded in accelerating the recovery of the results after the sanitary crisis caused by the bird flu and the Russian embargo which affected the results in 2006," Sadia said in a statement.

 

Sadia's net operating revenue for the first quarter was 1.89 billion reals, up 25.8 percent from 1.5 billion reals a year earlier.

 

Meanwhile, with a US$78 million Russian meatpacking facility in its final phase of construction, Sadia is now eyeing new international investments.

 

Gilberto Tomazoni, Sadia's CEO, also said that the company would use its "know-how" gained from its Russian partnership to explore new international investments.

 

The Russian unit, located in Kaliningrad, should be operational by the end of the year and was built with the help of a Sadia distributor and a loan from the International Finance Corporation of the World Bank, the company said. The company has closed a pre-agreement to supply processed chicken meat products from that facility to McDonald's throughout Russia.