Brazilian poultry and pork processor BRF SA posted a huge
first-quarter loss on Wednesday (May 4, 2022) as inflation affected consumer
sentiment and increased operating costs in its home market.
The BRF said in a statement that it had lost 1.5 billion reais
($ 304.9 million), compared to 22 million actual gains in the same period a
year earlier.
The company said its consolidated income before interest,
taxes, depreciation and repayment, a measure of operating income known as
EBITDA, was 121 million reais, a 90% reduction.
The results reflect a challenging operating environment
for the company, particularly in Brazil, where inflation reduced consumers’
purchasing power at the same time meat companies faced higher fuel and feed
prices.
BRF said disappointing food sales in Brazil ended up
increasing its inventories, affecting suppliers and logistics. This scenario
forced BRF to introduce measures including product promotions, corroding
margins in the process.
BRF burned 3.7 billion reais of cash to weather the
storm, the earnings statement said.
Aside from headwinds in Brazil, food sales to Asia fell 16.2%
to 109,000 tons while sales in its home market rose 2.6% to 549,000 tons.
In the halal market, where food must be produced
according to Muslim dietary requirements, the company increased sales volumes
by a healthy 20.5% to 215,000 tons.
[$1 = 4.9198 reais]
|Source: Online/SZK
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