May 6, 2022
BRF vows changes after massive first quarter losses
Major Brazilian poultry and pork processor BRF SA vowed to make changes to boost its margins and return to profitability after posting a BRL 1.5 billion (~US$298 million; BRL 1 = US$0.20) first quarter loss caused by soaring input costs and inflation in its local market, Reuters reported.
Lorival Luz, chief executive officer of BRF, said the company is changing how they operate in all areas by this month, to become more dynamic and successful, working towards sustainable growth and profit.
He said the plan does not include sales of assets or closing factories.
BRF shares fell as much as 12% before recovering to trade 6.3% lower in Sao Paulo, making it one of the exchange's worst losers.
The company made a BRL 22 million profit in the same period one year ago.
BRF's adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was BRL 121 million, a 90% decline.
BRF's results indicate a difficult operating environment for the firm, especially in Brazil, where consumers' purchasing power has worsened because of inflation, and meat companies are affected by soaring prices for fuel and livestock feed.
The company said poor food sales in its home country resulted in increased inventories, affecting logistics and suppliers. This forced the firm to introduce measures such as product promotions, eating away at margins.
BRF's sales to Asia dropped 16.2% to 109,000 tonnes, but domestic sales increased 2.6% to 549,000 tonnes. The company boosted sales for the halal market by 20.5% up to 215,000 tonnes.