March 25, 2009

Perdigao, Brazil's second-largest food company, posted on Monday (Mar 23) a net loss in the fourth-quarter, reversing profit in the year-earlier period because of large foreign exchange losses.

The net loss totalled BRR20 million (US$8.9 million), compared with profit of BRR98 million in the fourth-quarter of 2007, Perdigao said in a statement to Brazil's securities regulator.

Sales jumped 59 percent to BRR3.07 billion, led by a surge in dairy products and processed meat.

The jump in sales helped push earnings before interest, taxes, depreciation and amortization (EBITDA), 93 percent higher to BRR465 million from the same period a year ago.

But despite the jump in sales, Perdigao had BRR318 million in net financial losses in the quarter, caused by a weaker Brazilian currency which sank 23.8 percent in 2008 as investors dumped riskier emerging market assets.

Perdigao is among several meat processors around the world that have struggled since late last year because of high feed costs, low meat prices and a drop in sales due to the global recession.

The company held preliminary talks last week with rival Brazilian food company Sadia for an eventual tie-up, but that no accord had been reached.