February 6, 2007

Bird flu slashes Sadia's earnings in 2006

Bird flu has halved the earnings of one of Brazil's largest meat companies, Sadia in 2006.

Sadia earned R$ 376.58 million (US$ 180 million) in 2006, about half the R$ 657.3 (US$315.3 ) million seen in 2005. The overall sales of R$ 3.4 billion (US$1.6 billion)  were 15.2 percent less than in 2005.

Bird flu, a strengthened Brazilian real and the Russian ban on Brazilian pork had all taken its toll on earnings, the company said.

In spite of the losses, this is the second best result in the history of the company, according to Sadia.

In 2006, the sales volume within Brazil rose 12.2 percent in comparison to 2005, to a total of 928.6 thousand tonnes, with sales of R$ 4.5 billion (US$2.16 billion), a gain of 5.4 percent over the year before.

Reduced exports due to the bird flu scare made Sadia intensify its sales to the domestic market.

Volumes thus increased 9.4 percent and reached 155.5 thousand tonnes. However, profits fell 3.9 percent to R$ 492.3 million (US$236 million), due to a significant decline in average chicken prices in 2006.

Exports fell six percent between 2005 and 2006.