Brazil-based meat giant Marfrig today (14 August) booked a second-quarter profit, moving back into the black after a loss in the corresponding period last year.
Marfrig, which owns the Seara brand, posted net income of BRL15.5m (US$19.1m) for the three months to the end of June. A year earlier, it filed a net loss of BRL91m as financial expenses hit its bottom line.
The company's EBITDA more than doubled from BRL277.8m to BRL767.6m. Marfrig said the gain was due to "the dilution of fixed expenses, improvement in gross margin and gains from the purchase and sale of assets in the period".
The sale of a logistics operation in April, for example, boosted Marfrig's profits.
However, net revenue increased 9.3% to BRL5.82bn thanks to increased sales of "higher-value" products. Gross profit was up 19.7% at BRL852.9m as the improved sales offset higher soybean costs.
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Record quarterly net revenue of R$5.82 billion grows 9.3% from 2Q11
Gross margin expands 130 bps and expenses decrease 110 bps from 2Q11
CONSOLIDATED FINANCIAL HIGHLIGHTS:
Net operating revenue was R$5.82 billion, an increase of 9.3% from 2Q11, driven by the growth of 38.8% in sales of higher-value products (accounting for 46.8% of the Corporation’s revenue, compared to 36.8% in the prior year) and by the USD appreciation against the BRL in the period;
Gross Margin expansion of 130 bps to 14.7%, explained by the marked improvement in beef margins and better sales mix, with an increased share of higher-value products;
EBITDA in the period was R$767.6 million, up 176.4% from 2Q11, driven by the dilution of fixed expenses, improvement in gross margin and gains from the purchase and sale of assets in the period;
EBITDA margin stood at 13.2% in the quarter, compared to 5.2% in 2Q11;
Earnings per share was R$0.04, reversing the loss in 2Q11, with operational gains partially offsetting the non-cash impact from exchange variation caused by USD appreciation on the Corporation’s foreign-denominated debt;
Operating cash flow excluding discontinued operations was R$328.4 million, reversing the loss of R$89.9 million in the prior quarter;
The leverage ratio (net debt/EBITDA) ended 2Q12 at 3.73x, down from 4.51x in 1Q12.
On April 30, we concluded the partial sale of the specialized logistics services business of Keystone Foods to The Martin-Brower Company, with inflow of US$390.1 million into the Corporation's cash position;
In June, we began operations at the first plants producing higher-value products arising from the asset exchange agreement with BRF that exchanged the Quickfood asset in Argentina for assets in Brazil.
Original source: Marfrig
