BRF reports higher-than-expected Q1 net loss
The company lost 1.024 billion reais in Q1
16 May 2023
2 minute read
By: Brazilian poultry and pork processor BRF SA lost 1.024 billion reais ($204.7 million) in the first quarter, almost twice as much as analysts had forecast, citing an over-supplied global chicken market and high grain prices, Reuters reported, citing an earnings statement on Monday.
Analysts had expected the company to report a loss of 588.6 million reais for the period, the average of Refinitiv consensus estimates showed.
Earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, came in at 607 million reais, lower than the average of analysts forecast of 721.37 million reais.
In a press conference to comment on first quarter results, BRF's CEO Miguel Gularte said negative margins on the export segment, which in general reach double digits, weighed on results and drove the company into a loss.
"The EBITDA was reasonable vis-a-vis the difficulties faced by the entire sector," Gularte noted.
BRF said in home market Brazil, from which it derives most sales, consumers are deterred by high levels of debt. In its export segment, BRF said it grappled with a global fall in prices, impacting revenues and EBITDA margins, which stood at -1.7% compared with 7.7% in the same quarter a year earlier.
Brazilian poultry and pork export prices fell respectively by 5.8% and 4% in the first quarter, BRF said citing official trade data. The drop in prices was partially mitigated by record volumes of Brazilian chicken exports in March, the company said.
The expectation is that the outlook improves in the coming months, said CFO Fabio Mariano in a statement, citing a gradual rise of chicken prices.
“We are experiencing a scenario of gradual recovery in chicken prices in exports markets," Mariano said. "The sharp drop in grains will boost the company's profitability over the coming quarters," he said.
($1 = 5.0033 reais)
