Brazil’s leading poultry and pork processor, BRF SA, has reported a turnaround in its fortunes, ending a seven-quarter losing streak by posting a profit of 823 million reais ($165.26 million) in the final quarter of 2023. The earnings statement on Monday revealed a net profit of 754 million reais, surpassing analysts’ forecasts and attributing the success to factors such as a significant drop in corn prices, operational improvements, and a recovery in export markets.
BRF’s CEO, Miguel Gularte, highlighted the impact of lower grain prices and improved demand dynamics, expecting these favorable conditions to continue throughout 2024. The company’s expansion into international markets, including 66 new authorizations for export plants, contributed to the positive outcome.
Despite the strong fourth quarter, BRF reported a loss of 1.87 billion reais for the full year 2023, marking its second consecutive annual loss. However, higher fresh meat prices led to a return of double-digit EBITDA margins in the final quarter, with profitability increasing across geographies. The Gulf region, a key market for BRF’s “halal” products, experienced impressive gains, and sales in the Middle East were cited as the most evident example of international markets’ comeback.
In Brazil, BRF achieved an EBITDA margin of 15.6%, a significant improvement from the previous year, driven by increased demand for processed food products. The company reported overall net sales of 14.4 billion reais in the fourth quarter, slightly below the same period in 2022, but still strong due to the holiday season.
BRF generated 613 million reais in cash during the period, marking the first time in three years it accumulated such an amount. The CFO, Fabio Mariano, emphasized this positive cash flow in his comments about the results. The company’s EBITDA for the fourth quarter exceeded analyst expectations, reaching 1.9 billion reais.
For the entire year of 2023, BRF reported an EBITDA of 4.7 billion reais, a 15% increase compared to 2022, demonstrating resilience in the face of a global chicken glut.
