BRAZIL – Brazilian meat and food processing giant BRF ended the third quarter of 2014 with net income of R$624 million, an increase of 117.5 per cent compared to the third quarter of 2013.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached a record R$1.2 billion, an increase of 61.3 per cent compared to the same quarter last year.
BRF said that the performance is a result of management methods and processes that were implemented a year ago and demonstrates the consistency of results.
In the third quarter of this year, the consolidated Net Operating Income (NOI) reached R$8 billion, an increase of 5.3 per cent compared to the same period last year, driven mainly by Brazil.
The initiatives adopted in the Brazilian market have started to show positive results, as the project “go-to-market” (GTM), which contributed positively to growth of 5.2 per cent in volume compared to the third quarter of 2013.
In international markets, BRF said that the performance was also solid, with an increase of 3.8 per cent in net sales, reaching R$3.4 billion, compared to the same period in the previous year.
The sales performance and operational improvements provided drop in net debt over EBITDA of the Company, from time 1.51 to 1.40 in the quarterly comparison since 2.29 times in 3T13.
The company is pressing ahead with the divestment of assets that are not core to the company’s main business, including the sale of two beef slaughter plants to Minerva and the potential sale of the dairy division to Parmalat SpA part of the Groupe Lactalis. This deal is waiting approval from CADE.
The ROL in Brazil reached R$3.5 billion, up eight per cent compared to the same period last year, driven by volume growth and good performance in small retail.
The completion of consolidation of the sales force in small retail (the initial phase of “go to market”) and simplifying processes through cutting SKUs, as well as improving the company’s level of service, have already started to translate into higher revenue.
EBIT in Brazil reached R$383 million, up 39.2 per cent compared to the third quarter of 2013.
The company also holds leading market share in processed meat (51.1 per cent), Frozen produce (58.7 per cent), Pizza (50.8 per cent) and margarine (58.8 per cent).
During the quarter, the international market for meats showed and upward trend.
BRF said the company’s strategies for maximising volume and profitability of markets continue to generate positive results.
The company has started to see the benefit from the opening of the Russian market since September, which was previously banned to BRF plants.
The International ROL reached R$3.4 billion, an increase of 3.8 per cent on 2013.
International EBIT reached R$413 million, up 221.7 per cent over the same period last year, with a margin of 12.2 per cent compared to 4.0 per cent in 2013.
In the third quarter of 2013, the ROL for Dairy reached R$767 million, up 0.9 per cent year on year, driven by a rise in the average price of 9.0 per cent compared to the same period last year.
The volume was 7.5 per cent lower in the period. Dairy EBIT was R$68 million, up 98.9 per cent compared to the third quarter of 2013.
This result was driven by lower funding costs of milk, higher efficiency and greater dilution of expenses.
The ROL for Food Services totalled R$389 million, up 3.9 per cent compared with the previous year.
In comparison with the previous quarter, net sales rose by 1.4 per cent due to an increase in volume of 3.9 per cent.
The Food Services EBIT was R$38 million, an increase of 43.0 per cent over the same period of 2013, with a margin of 9.9 per cent.
TheMeatSite News Desk