BRF’s Q1 Earnings Surpass Expectations

BRF’s first-quarter profit exceeded analysts’ forecasts due to robust performances both domestically and internationally, according to Reuters, citing a Tuesday earnings statement. The Brazilian pork and poultry giant, BRF SA, reported earnings of 594 million reais ($117.17 million), surpassing the analysts’ predicted 449.79 million reais.

Operating margins reached 15.8%, which the company’s management praised, particularly as the first quarter typically sees weaker performance relative to the year-end holiday season.

Key to BRF’s strong quarterly outcome were operational efficiencies, stringent financial discipline, and what the company described as “an optimized capital structure.” These factors contributed to a reduction in BRF’s debt levels, with the net debt to EBITDA ratio dropping to 1.45 times by March’s end—the lowest it has been in eight years.

CFO Fabio Mariano commented on the results, stating, “This quarter’s outcome affirms that we are on the right track toward reducing debt and enhancing our business profile to create shareholder value.”

In terms of international business, BRF expanded its market reach by securing 25 new export licenses, enhancing its ability to target specific markets. The company saw a notable EBITDA margin of 16.9% in this segment, fueled by sales in Turkey and the Gulf countries. The timing of Ramadan celebrations and a rebound in export prices helped drive these results.

Domestically, BRF reported that its core meat products saw margin growth both annually and quarterly, independent of seasonal holiday effects. A significant factor in the improved margins within Brazil was a 12.1% annual decrease in the cost of goods sold, attributed to lower grain prices, a crucial component of animal feed.

($1 = 5.0695 reais)