Marfrig Achieves Best Ever Quarterly Revenue

BRAZIL - Marfrig achieved a 64 per cent increase in net revenue in the first quarter of this year compared to the same period of 2010, driven by gains in its Brazilian beef business and improving Uruguayan, SEARA and Keystone operations.
calendar icon 17 May 2011
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Marfrig Alimentos S.A. has reported results for the first quarter ending 31 March 2011.

Marfrig produced its best performance to date for first quarter revenue despite a highly challenging global backdrop after Beef Brazil and Seara drove market share gains in our core Brazil market. Seara synergies, Keystone Foods, Beef Brasil and Europe performances, cost-cutting measures and the ability to offset cost increases partly helped Marfrig balance higher grain prices and the impact of accrued interest on net profit.

For the quarter, net revenue totalled 5.25 billion real (BRR), up 64.3 per cent from 1Q10's BRR3.20 billion and a 1.2 per cent decrease versus 4Q10's BRR5.32 billion, despite seasonal weakness typically seen in the first quarter.

Gross income was BRR728.8 million, up 33.4 per cent on 1Q10's BRR546.3 million, from R$851.8 million in 4Q10, while net profit totalled BRR25.2 million versus a loss of BRR52 million in 1Q10.

Marfrig unveiled two joint-ventures in China with the country's leading food producers.

Value-added products and specialty dishes were 37.1 per cent of consolidated revenues versus 25.1 per cent in 1Q10.

Beef exports grew, reaching 25.4 per cent of total Brazilian beef exports in March versus 17.3 per cent in February, according to SECEX (Foreign Trade Secretariat of the Ministry of Development, Industry and Foreign Trade, Brazil)

In May 2011, Marfrig issued its tightest-ever coupon and yield after building a record US$5.0 billion book for its upsized US$750 million 8.375 per cent coupon seven-year bond. The result lowers Marfrig's average rate of interest on its debt, helping it build a new tighter debt curve going forward

CEO and founder, Marcos Molina, commented: "Marfrig enjoyed its best-ever first-quarter revenue performance during what is seasonally the slowest quarter of the year. We continued to build revenues in a challenging environment around the world and extending our reach through a local presence in several countries to achieve synergies among our divisions.

"Our top line result demonstrates our ability to cope in the toughest conditions. Our strategy is to ensure we continue to balance the effects of grain on customer prices, control working capital, improve cash flow and keep increasing our offer of high-quality products and specialty dishes," he said.

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