May 31, 2011

Brasil Foods' first quarter earnings surge drastically

Brasil Foods' gross profit from January and March of 2011 has increased sixfold in contrast to the same period last year.

The meat processor achieved a gross profit of BRL816.4 million (US$511.6 million).

The Brazilian company, headquartered in Sao Paulo, compensated for strongly reduced beef exports by exporting more poultry meat and also by increasing sales in a larger domestic market.

Turnover, on a yearly basis, grew 19% to BRL6 billion (US$3.76 billion). Exports of beef dropped by 16.6%; pork exports decreased 2%. Poultry exports, however, grew by 11%. Brasil Foods mainly does business with the Middle East and China and is the world's largest meat producer after JBS.

Exports to the Middle East accounted for 33.6% of total exports, the Far East following by 21.2%, and Europe with 17.3%.

Domestic demand to meat grew as well, as the Brazilian economy is prospering and so do wages. Domestic turnover grew 20% to BRL3.6 billion (US$2.26 billion). The company mainly aims to stimulate pork sales as Brazilians are not really into eating pork.

Investments in the first quarter amounted to BRL168.8 million (US$105.8).

Brasil Foods' gross margin is about 14% in contrast to 8% in 2010.