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Brasil Foods Sees Strong Domestic Sales Growth

3 May 2012, at 9:02am

BRAZIL - Brasil Foods (BRF) has announced its first quarter results, which include a 5.3 per cent increase in revenue and net income of 153 million reals (BRR). While some key export markets were challenging, domestic sales were up 11 per cent.

The Company has now been assigned an investment grade rating by all three leading rating agencies.

BRF ended the first quarter 2012 reporting net sales of BRR6.3 billion, a year–on–year increase of 5.3 per cent.

Quarterly gross profits were BRR1.3 billion, a decline of 13 per cent, primarily reflecting the challenges of the overseas market which saw a significant decline in prices. Net income in the quarter was BRR153.2 million while EBITDA reached BRR532 million, corresponding to a margin of 8.4 per cent, compared with BRR816 million in the preceding year, same quarter, and a margin of 13.6 per cent.

The Company’s results reflected the challenging scenario in the export market, as had already been observed in the fourth quarter of 2011. Some key markets such as Japan and the Middle East continued to suffer from a process of adjustment and running down of levels of inventory and merchandise flows. Export revenues in the quarter were BRR2.4 billion, practically unchanged as compared with the same quarter last year.

Conversely, the Company reported a good performance in sales to the domestic/retail market amounting to BRR3 billion, a growth of 11 per cent, in spite of below–forecast consumption in the Brazilian retail sector overall.

Similarly, the food service segment reported a good performance posting an increase in net sales of 10.4 per cent. During the period, the Company launched 11 products between ‘in natura’ and processed lines for the major global networks, a savoury snacks platform, a grill line and rotisserie products.

The Company also achieved an investment grade risk rating classification from all three principal world rating agencies. In their assessment, the agencies emphasized competitive advantages such as brand, distribution, corporate governance and financial soundness, among others. Between the months of March and April, Standard & Poor’s and Moody’s assigned an investment grade rating to the Company while Fitch Ratings reiterated its rating first issued a year ago.

You can view the full Management Report by clicking here.

The Quarterly Financial Information report is available by clicking here.