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Brasil Foods Posts Best Ever Operating Income

by 5m Editor
15 November 2010, at 9:28am

BRAZIL - BRF Brasil Foods posted a third quarter 2010 operating income of 416 million real (BRR), six-fold higher than the same period last year.

BRF Brasil Foods (BRF) posted a third quarter 2010 operating income of BRR416 million, 613 per cent higher than the third quarter last year and the best operating result since 2009 and confirming a consistent improvement with each successive quarter.

Gross sales were BRR6.5 billion, a year-on-year growth of 6.9 per cent and a 3.5 per cent improvement in relation to the preceding quarter this year. Gross profits were BRR1.6 billion, an increase of 44 per cent over the same quarter in 2009 and equivalent to a margin of 27.8 per cent.

Operating performance produced an EBITDA of BRR613.6 million, 111 per cent higher. This reflected an effective control over costs, good domestic market performance and the consistent recovery in export markets.

Domestic market sales amounted to BRR4.1 billion, 8.0 per cent more than for the same period in the preceding fiscal year, indicative of an expanding economy. The meat segment recorded increases in both sales (5.6 per cent) and volume (5.3 per cent). The dairy products business also saw volumes climb 8.4 per cent and sales, 3.4 per cent.

As already detected in the previous quarter, between the months of July and September, exports continued to present an improvement in margins and recovering demand and prices in BRF's leading markets (Far East, Middle East, Eurasia and Africa). Exports increased 4.5 per cent in terms of revenue reaching BRR2.4 billion and 10.4 per cent in volumes.

Net income in the quarter was BRR189.7 million, corresponding to a net margin of 3.3 per cent. On a quarter-on-quarter comparative basis, the net result for the period was up by BRR58 million.

The improvement in operating cash flow and the financial discipline adopted by BRF have been instrumental in reducing the net debt to EBITDA ratio to 1.9 times. This serves to underscore the strength of the balance sheet which continues to show a good portion of debt (74 per cent) with long term maturities and low exposure to currency risk.

BRF's sales exceeded the BRR18.7 billion mark for the first three quarters of 2010. The Company posted an increase in gross profits of 32 per cent compared with the first nine months of 2009, registering BRR4.3 billion.

Despite the unfavourable scenario of increasing principal raw material costs and foreign exchange pressure, EBITDA was BRR1.65 billion, a growth of 93 per cent compared with the same period in 2009. Net income was BRR374 million, a 69 per cent increase.

Further Reading

- You can view the full report by clicking here.