May 16, 2013

Brazil's Vigor posts mixed Q1 results

Vigor, a Brazilian dairy processor, has reported a set of mixed first quarter results, with sales up but earnings before income tax, depreciation and amortisation (EBITDA) and net income lower on-year.

Net earnings amounted to BRL1.5 million (US$742,793), a 93.4% decline on the prior year period, the company reported Wednesday (May 15). Last year's figure was, in part, favoured by a gain from higher interest revenue and positive exchange variation on hedging.

EBITDA in the quarter was at BRL13.8 million (US$6.8 million), a 42.4% drop on last year and negatively impacted by higher marketing investment, higher freight and warehousing costs, and structuring of new functional areas within the company.

Vigor, however, reported "record" gross profit and gross margins. Net revenue was up 11.7% at BRL352.4 million (US$174 million). The increase came despite lower volumes as Vigor focused more on added-value products. It also continued to expand its Greek yoghurt business.

"The road in front of us is challenging, but the unique opportunities the Brazilian dairy sector offers and the reliance on our people will certainly guide our way," CEO Gilberto Xando said.