SUBSCRIBE

Breaking News on Global Meat Trading and Processing

Headlines > Financial

Read more breaking news

 

 

Brazilian meat giant ‘dissatisfied’ after loss

Post a comment
Oscar Rousseau

By Oscar Rousseau+

24-Feb-2017
Last updated on 24-Feb-2017 at 15:01 GMT2017-02-24T15:01:07Z

Loss-making BRF said sales of flagship brand Sadia performed well in the Middle East
Loss-making BRF said sales of flagship brand Sadia performed well in the Middle East

Meat processor BRF’s fourth-quarter net income fell by over 130% as a combination of political uncertainty and market challenges pushed results into the red.

BRF, which claims to be one of the world’s largest meat processors, posted a loss of BRL460 million ($150m), after posting BRL1.4bn ($462m) in the fourth quarter a year earlier.

2016 was marked by challenges that affected our short-term results,” the company said in a statement.

The combination of industry factors, current scenario and political uncertainty, added to certain internal execution challenges, caused results to be well below expectations and well below the company’s potential.

These short-term results leave BRF deeply dissatisfied.” 

Focus on globalisation

High raw material costs and increased competition in regional markets, especially Asia, contributed to the loss.

The company said it had started 2017 with absolute focus on the commercial and operational execution of its business plan. This plan will see BRF enhance its global production chain and roll out new products as the Brazilian firm targets consumers in every corner of the globe.

While BRF expressed disappointment with its fourth- quarter trading figures, the business said it was pleased with the progress it had made to grow as a global company. Sales volumes to all markets increased by 16% year-on-year.

BRF sells its products in more than 150 countries and has 54 factories across Argentina, Brazil, the United Arab Emirates, Netherlands, Malaysia, the UK and Thailand.

BRF Q4 results – in brief

Net revenue: BRL8.5bn ($2.7bn)
Loss: BRL460m ($150m)

‘Atypical’

In its home market Brazil, BRF had what it called an “atypical” quarter. Meat consumption is low, as the country continues to struggle with recession, and results were also hit by higher margins, particularly the rising cost of grain.

In the Middle East and North Africa (MENA), a challenging macroeconomic climate caused volume sales to fall by 3%. Processed meat, however, saw accelerated growth of 15% quarter-on-quarter.

Revenue was dented in Asia as a result of increased local competition combined with the devaluation of local currencies relative to the Brazilian real.

Net operating revenue dropped by 10% quarter-on-quarter in Europe, as BRF had to compete in what it called a “challenging macroeconomic” market.

Latin America, excluding Brazil, saw net operating revenue rise by 6.3% quarter-on-quarter with Mexico and Cuba proving strong volume-based markets.

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products

Related suppliers