Poultry shipping margin worsens, and BRF suffers a R$1 billion loss

Pressured by the worsening margins for poultry exports, the food company BRF recorded a net loss of R$ 1.02 billion in the first quarter of this year. The loss was 35% lower than in the same period in 2022 when it reached R$ 1.58 billion.

In the coming months, the company expects to improve its results. The recovery, says the company, will occur thanks to the fall in grain prices, especially corn used in feed, and the reaction of the value of exported meat.

The adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of BRF, which was R$ 121 million in the first quarter of last year, rose to R$ 607 million in the interval from January to March 2023.

Net revenue, in turn, grew 9.4% to R$13.2 billion. The net operating revenue from the operation in Brazil rose 9.1% to R$6.42 billion.

“Brazil did very well, and the international market suffered with negative margins due to the chicken oversupply. The whole sector suffered with deteriorated external prices,” the company’s CFO, Fabio Mariano, told journalists.

Please find below the volume of poultry exported by Brazil between Jan 2019 and Mar 2023, according to DataLiner.

Poultry exports from Brazil | Jan 2019 – Mar 2023 | WTMT

Source: DataLiner (click here to request a demo)

However, the prices of export orders for April and May of the main cuts traded by the company have already shown a strong recovery. This occurred mainly in the chicken segment, where there was a global oversupply at the beginning of the year that improved the company’s net result in the first quarter.

Mariano also highlighted that there are opportunities for expansion in the international market. “It is very important for us to take advantage of the opportunities to have new markets and other sales destinations,” said the executive.

In addition, Brazil is in the midst of developing the second 2022/23 corn crop, with expectations of a voluminous harvest, which puts pressure on the value of the grain, according to BRF CEO Miguel Gularte. “We have prepared ourselves to capture the opportunity of a fall in grains, and this will show up in the results of the next quarters,” said the executive to journalists in a videoconference.

He pointed out that it is already possible to find corn near R$ 30 per sack in some Brazilian states, “a value that has a very big impact in our chain and in the margins of our products”. Data from the Center for Advanced Studies in Applied Economics (Cepea) show that the grain exceeded R$ 100 per 60-kilo sack in the first quarter of 2022 and spent the whole of the last quarter above R$ 80.

Gularte said that BRF was not surprised by the news that health authorities have confirmed two cases of avian influenza in wild birds. The animals were found on the coast of Espírito Santo. “This has been discussed for a long time,” said the executive.

He said that the positioning of the Brazilian Association of Animal Proteins (ABPA) was very enlightening, indicating that the cases should not bring consequences to commercial poultry farming. Earlier, the entity informed in a note that the existence of a case of highly pathogenic avian influenza in migratory seabirds in Brazil was confirmed.

Source: Valor Econômico

To read the full story, access: https://valor.globo.com/agronegocios/noticia/2023/05/15/margem-de-embarque-de-frango-piora-e-brf-tem-prejuizo-de-r-1-bi.ghtml

Sharing is caring!