October 31, 2008

Major Brazilian food producer Sadia has posted a third-quarter loss of BRL 777.4 million (US$369.2 million), compared with a profit of BRL 188.4 million (US$89.5 million) in the same quarter last year.

EBITDA remained stable at BRL 272.3 million (US$129.4 million), down slightly from last year's BRL 273.2 million (US$129.8 million).

Last month, Sadia announced a loss of BRL 760 million mainly from foreign exchange derivatives, which were in excess of its needs for export operations. The loss was greater than its total 2007 profit of BRL 689 million but the company obtained a credit line for one year to tide it over.

On September 30, Sadia had about BRL 2.3 billion available in case of potential margin calls as well as to cover operational costs, according to the company's earnings report.

Despite the losses, turnover had increased 28 percent from a 16-percent growth in sales volume and the company was investing more, Sadia said.

The increase in prices in all segments the company is active in, together with the good performance of chicken exports and processed meat in the domestic market, had attributed to the positive turnover result, Sadia said.

Sadia earned a profit of BRL 120 million for the second quarter of 2008.

BRL 1 = US$0.4751 (October 31, 2008)