November 1, 2011

Meats business and synergies boost BRF Q3 earnings 

BRF Brasil Foods generated a net income of BRL365 million (US$215million) in the third quarter, an increase of 73% that was boosted by operating performance, particularly the meats business, coupled with capitalising on synergies.

Net sales was BRL6.3billion (US$3.7billion), up 10.4% on-year. Gross profits improved 13.5% to BRL1.6billion (US$900million). EBITDA reached BRL722.5million (US$418.32million), equivalent to a margin of 11.5%.

The results were achieved despite the challenging foreign exchange situation and the high cost of the main raw materials, both of which contributed to a squeeze on the quarter's margins.

Domestic market sales revenue reported growth in relation to meats (18.5%) as well as dairy products (8.2%), surpassing the BRL3.8billion (US$2.2billion) mark, an increase of 14%. The period's highlight was in processed meat products (industrialised and frozen), which contributed an increase in sales of approximately 24%.

Revenues from exports came to BRL2.5billion (US$1.5billion), 6% higher than in the third quarter of 2010. The performance registered on the Far Eastern, European, Middle Eastern and American markets offset the losses arising from the ban on the Russian market. The exchange rate affected the competitiveness of the company's products sold on the international market for most of the quarter.

BRF's investments totalled BRL252.6million (US$146.25million). Of the total, more than 61.4% was dedicated to projects for productivity, improvements and automation, while 32.6% went to new projects.

For the first nine months of 2011, BRF registered net income of BRL$1.2billion (US$690million), a 180% on-year improvement and a reflection of the recovery in export markets in the two initial quarters of the year together with the most satisfactory level of domestic business. Net sales were BRL18.6billion (US$10.8billion), up 14% from the same period in 2010. Gross sales totalled BRL4.7billion (US$2.7billion) in the period -- equivalent to growth of 21%. EBITDA of BRL2.3billion (US$1.3billion) represented an increase of 39%, with a margin of 12.5%.