May 4, 2022

 

Marfig Global Foods announces 61.1% drop in first-quarter profit

 

 

Major Brazilian meatpacker Marfig Global Foods announced a BRL 109 million (~US$21.96 million; BRL 1 = US$0.20) first-quarter net profit, 61.1% down year-on-year, which was caused largely by the impact of its equity holding in BRF SA, Reuters reported.

 

Tang David, chief financial officer of Marfig, said the company's profit was affected by the mark-to-market investment in BRF.

 

Marfig, BRF's biggest shareholder, purchased BRL 1.8 billion (~US$362 million) of the BRF's stock in February to keep its 33.27% stake. The next month, BRF approved Marcos Molina, Marfrig's controlling shareholder, as the company's new chairman.

 

Marfig's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached BRL 2.75 billion (~US$554 million) in the quarter, 60.9% up compared to the same period in 2021.

 

National Beef, Marfig's North American unit, accounted for BRL 2.3 billion (~US$463 million) or 87% of its total adjusted EBITDA in the quarter, 63.4% higher compared to the previous year.

 

Tim Klein, chief executive of Marfrig's North American operations, said demand from the North American market remains strong.

 

There was also strong growth reported in South America, thanks to increased demand from China for Brazilian beef. Adjusted EBITDA for the unit was 94.9% up in the period.

 

China temporarily banned imports of Brazilian meat in 2021 because of to two atypical cases of mad cow disease, but resumed shipments in December.

 

About 68% of total export revenues of Marfrig's South American operations were linked to sales to China and Hong Kong between January to March of 2022.

 

-      Reuters

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