July 27, 2007

Recovery of chicken exports may boost Sadia's earnings

A recovery in the chicken export markets bodes well for Brazilian food company Sadia's (SDA) earnings, investment bank Brascan said in an analyst's note.

"We believe that Sadia's results will confirm the profit and margins recuperation trend will continue from the third quarter of 2006," Brascan equity analyst Felipe Cunha wrote in the report.

Cunha said he expected second quarter 2006 net revenue of 1.9 billion reals (US$1 billion), or up 23.7 percent from the same period last year.

Cunha cited growing chicken exports to Europe and a general end to consumer fears following the bird flu outbreaks in Europe last year.

Brazil is the world's leading chicken exporter and Sadia is one of the country's leading food companies.