Minerva’s integration of Marfrig units may exceed one year

“We’ve only been in the factories for eight days, so evaluations are ongoing,” said Minerva’s CEO, Fernando Galletti de Queiroz, during a conference call with analysts to discuss third-quarter results. On October 28, Minerva acquired 13 production units and a distribution center from Marfrig in Brazil, Argentina, and Chile.

Mr. Queiroz noted that the acquired plants operate under a different management model and that some facilities have lower maintenance standards compared to Minerva’s, a situation arising naturally from the transition and extended sale process initiated in August last year.

According to Mr. Queiroz, the transfer of operating authorizations is expected to be completed by year-end in each country involved in the transaction.

The impact of this integration will likely be reflected in Minerva’s upcoming financial results as adjustments progress across the plants. In the third quarter, Minerva reported a 33.3% drop in net profit to R$94.1 million, attributed to increased gross debt from acquiring Marfrig’s units.

Itaú BBA analysts Gustavo Troyano and Bruno Tomazetto highlighted favorable fundamentals in the beef sector for Minerva, though the market focus remains on the integration of the new units. “We expect to reassess our projections for the company soon,” they noted, mentioning the margins of the new assets as a critical factor for evaluation.

Simultaneously, Minerva is launching a R$2 billion offering for Agribusiness Receivables Certificates (CRAs), with the notes, backed by debentures, maturing in five to ten years.

Source: Valor Internacional