The third quarter of 2011 marked an important step towards the consolidation of Marfrig's long-term strategy. CEO and Chairman, Marcos Antonio Molina dos Santos, reports that, as expected, the Company improved its operational efficiency, capturing synergies among the business divisions, reducing costs and expenses and generating 310.5 million real (BRR) in operating cash flow.

He said: "These actions underscore our management team's commitment to delivering consistent results and creating value for shareholders.

"Despite the uncertainties in the global economic environment throughout the quarter, including inflationary pressure in the countries where we operate, exchange rate volatility and sustained high grain and cattle prices, Marfrig recorded robust net revenue growth of 45.1 per cent over 3Q10 and of 3.8 per cent over the previous quarter.

"In line with the strategic goals to improve operations and boost financial discipline, we implemented several initiatives which resulted in higher capacity utilisation in the plants, better control and management of working capital accounts, lower administrative and selling expenses, and, as expected, a reduction in Capex (BRR92.9 million, excluding breeding stock) over previous quarters. The combination of all these factors allowed us to make considerable progress in generating free cash flow and led to a increase in EBITDA.

"The positive results show that our strategy of building a complete portfolio of high value-added products, strong brand loyalty and a global platform for the development, production, sale and distribution of food products, on track for success over the long-term.

"Finally, I would like to mention some strategic highlights for the current quarter:

• The creation of Keystone Foods América Latina, an operation that will, in the long term, strategically ensure our leadership and differentiation in the food-service segment in Brazil and Mercosul
• The consolidation of our beef, lamb and leather operations, which will further improve our competitiveness in a market where we are already a major player
• The creation of a shared service center in Itajaí, in the Santa Catarina state, bringing increased efficiency and synergy gains to our Brazilian operations
• The launch of new products such as Seara's ready-to-eat meals and sandwiches, as well as the Seara Angus and Seara Cordeiro (lamb) lines, augmenting the product mix with higher value-added products
• The third quarter also marked the beginning of vertically integrated chicken production in China, with a slaughter volume of 5.4 million birds in the period – as a result, the Company now produces poultry locally on four continents
• Marfrig was awarded the Transparency Trophy by Anefac, Fipecafi and Serasa Experian, the first time a food company has won this award. The Company was also elected the 'Best Meat Company' by Exame magazine's 'Best and Biggest Guide' published by Grupo Abril, and the 'Best Meat Company' by Globo Rural magazine, published by Organizações Globo.

"We are developing, producing and providing our clients daily with diversified, multi-protein solutions throughout the consumption chain, ranging from fresh to value-added processed products, and balanced between the domestic, export, retail and food-service markets, in order to ensure supply throughout the entire global chain.

"All these achievements underline our commitment to develop of Company that is considered a benchmark in efficiency, focused on generating results and driving sustainability, which is absolutely essential and strategic, to ensure that our clients in Brazil and around the world will receive the best possible service," concluded Mr Molina dos Santos.

Further Reading

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