By Ana Mano
SAO PAULO (Reuters) -Brazilian food processor BRF SA on Monday reported net income of 823 million reais ($165.26 million) for the fourth quarter of 2023, the first gain after seven consecutive quarters of losses, according to an earnings statement.
Analysts had predicted net income of 339.57 million reais for BRF, which makes pork and poultry products.
The company also said it generated cash to the tune of 613 million reais in the period, the first time in three years it amassed that much, CFO Fabio Mariano said in comments about results.
Factors contributing to the positive quarterly performance include a sharp drop in the price of corn, a key feedstock ingredient, along with operating improvements amid a broad turnaround that began several quarters ago.
A recovery of export markets and 66 new authorizations for BRF export plants also helped the company “to end the year better than it started,” CEO Miguel Gularte said.
In spite of a strong fourth quarter, BRF lost 1.87 billion in 2023, marking the second consecutive yearly loss for the world’s largest chicken exporter.
Still, BRF said higher fresh meat prices drove a return of the double-digit EBITDA margins in the final quarter, referring to the international segment. And the outlook remains positive for that segment in terms of volume and pricing, management said.
According to BRF, profitability rose “across geographies” in the final quarter of 2023. But nowhere were gains as impressive as in the Gulf region, a key market where it sells “halal” products produced according to Muslim dietary requirements.
The Sadia and Banvit brands remain market leaders in its halal segment, BRF said. Sales in the Middle East are “the most evident example of international markets’ comeback,” CEO Gularte said.
In home market Brazil, the company posted EBITDA margin of 15.6%, higher than the 9.1% recorded in the same quarter of the previous year on the back of demand for processed food products.
BRF said overall net sales in the fourth quarter were 14.4 billion reais, 2.3% below the fourth quarter of 2023, even as the final quarter of the year is normally strong because of the holiday season.
The company also noted EBITDA, a measure of operating income, was 1.9 billion reais in the fourth quarter, above the consensus of analysts expectations of 1.79 billion reais.
In the whole of 2023, BRF reported EBTIDA of 4.7 billion reais, 15% higher than 2022 despite a global chicken glut.
($1 = 4.9799 reais)
(Reporting by Ana Mano; Editing by Steven Grattan and Stephen Coates)
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