Brazilian pork and poultry processor BRF SA (BRFS3.SA) on Wednesday reported a second-quarter net loss of 468 million reais ($91.86 million), wider than the 156.93 million loss forecast by analysts.
BRF reported earnings before interest, tax, depreciation and amortization (EBITDA) of 1.368 billion reais, above an estimated 1.202 billion reais. BRF said its results were affected by two non-recurring events in the quarter.
The first was a negative 445 million reais hit to revenue from international markets, resulting from “hedge accounting” related to a debt security that matured in June 2022.
The other was hyperinflation in Turkey that affected the way BRF recognizes the value of assets and liabilities there.
Still, BRF said net revenue rose by 11.2% to 12.9 billion reais in the second quarter.
BRF sells most of its products in its home market Brazil though it exports to several countries. Lower pork sales to China, for example, affected results negatively.
The company said it continued to reel from higher grain prices impacting the cost of livestock feeds, although it was able and pass on some of the increase to clients.
BRF said it was able to hike the price of processed foods by an average of around 19%,and of poultry by almost 22%. Pork prices, however, fell by nearly 15% on weak demand.
Internationally, BRF sold 478,000 tonnes of pork and poultry products, 4.2% less than in the same quarter a year ago.
On a positive note, BRF performed well on the international halal meat market, where volumes sold rose 13.4% in the quarter from a year earlier, helping revenue from those sales to rise by almost 28% to 2.6 billion reais.
Halal meat is sold to Islamic countries and produced according to Muslim dietary requirements.