March 27, 2012

Brasil Foods reports strong earnings for 2011

Brazilian poultry and pork processor, Brasil Foods, concluded 2011 with strong earnings, exceeding forecasted growth in net operating revenue and investments despite the turbulent economic environment.

Net sales for 2011 were BRL25.7 billion (US$14 billion), a 13.3% increase over 2010. Brasil Foods attributed the gain to a strong performance in the domestic meat, food services and export markets.

Production costs came under extreme pressure during the year due to the increase in raw material prices – in Brazil, corn prices rose 37.5% and soybeans, 14.7%, while on the international market increases were 59% and 25.9%, respectively.

However, the company's strategies which focused on the increase in productivity, sales efficiency, price and cost management policy as well as investments in innovation were instrumental in minimising the effect of rising commodity prices.

Net adjusted fourth quarter income decreased 6.7% to BRL336 million (US$184.7 million). The company said that this decline is related to narrower margins on export business during the quarter.

Fourth quarter net sales were BRL7 billion (US$3.8 billion), a 10.9% year-on-year increase. Revenue in Q4 in the food services area advanced 10% with an operating margin of 16.8%, Brasil Foods said.

Brasil Foods was created in 2009 after the merger of Brazilian meat processing giants, Perdigão and Sadia.