Marfrig swings to net profit of 25.2M reais in Q1, from loss of 52M reais last year; revenues up 64.3% year-over-year to 5.25B reais; Beef Brazil, Seara drive market share gains in company's core Brazil market
Alison Gallant
SAO PAOLO
,
May 16, 2011
(press release)
–
Marfrig Alimentos S.A. (BOVESPA: MRFG3 and NYSE (Level 1 - ADR): MRTTY), a global food company, today reported results for the first quarter ending March 31, 2011.
IFRS - R$ Million 1Q11 4Q10 1Q10 Var. Var. OPERATIONAL NET REVENUES 5,252.1 5,317.8 3,195.9 -1.2% 64.3% Cost of Goods Sold (4,523.4) (4,466.0) (2,649.6) 1.3% 70.7% GROSS INCOME 728.8 851.8 546.3 -14.4% 33.4% Gross margin 13.9% 16.0% 17.1% -214 bp -322 bp SG&A (569.9) (427.0) (335.4) 33.5% 69.9% Net income 25.2 161.1 (52.0) -84.3% N/A EBITDA 337.3 693.3 319.2 -51.3% 5.7% EBITDA Margin 6.4% 13.0% 10.0% -662 bp -357 bp
Marfrig produced its best performance to date for first quarter revenue despite a highly challenging global backdrop after Beef Brazil and Seara drove market share gains in our core Brazil market. Seara synergies, Keystone Foods, Beef Brasil and Europe performances, cost-cutting measures and the ability to offset cost increases partly helped Marfrig balance higher grain prices and the impact of accrued interest on net profit.
Key Financial, Operational and Strategic Highlights
* Net revenue totaled R$5.25 billion, up 64.3% from 1Q10's R$3.20 billion and a 1.2% decrease versus 4Q10's R$5.32 billion, despite seasonal weakness typically seen in the first quarter
* Gross income was R$728.8 million, up 33.4% on 1Q10's R$546.3 million, from R$851.8 million in 4Q10
* Net profit totaled R$25.2 million versus a loss of R$52 million in 1Q10
* Marfrig unveiled two joint-ventures in China with the country's leading food producers
* Value-added products and specialty dishes were 37.1% of consolidated revenues versus 25.1% in 1Q10
* Beef exports grew, reaching 25.4% of total Brazilian beef exports in March versus 17.3% in February, according to SECEX (Foreign Trade Secretariat of the Ministry of Development, Industry and Foreign Trade, Brazil)
* In May 2011, Marfrig issued its tightest-ever coupon and yield after building a record US$5.0 billion book for its upsized US$750 million 8.375% coupon seven-year bond. The result lowers Marfrig's average rate of interest on its debt, helping it build a new tighter debt curve going forward
"Marfrig enjoyed its best-ever first-quarter revenue performance during what is seasonally the slowest quarter of the year. We continued to build revenues in a challenging environment around the world and extending our reach through a local presence in several countries to achieve synergies among our divisions," said CEO and founder Marcos Molina. "Our top line result demonstrates our ability to cope in the toughest conditions. Our strategy is to ensure we continue to balance the effects of grain on customer prices, control working capital, improve cash flow and keep increasing our offer of high-quality products and specialty dishes."
1Q11 x 4Q10
1Q11 x 1Q10
About Marfrig
Marfrig Alimentos SA is a global leader in fresh and processed foods. Distribution segments include beef products, pork, lamb, and poultry, as well as other food products. The Group's diversified operational base includes 150 production units, as well as trading and distribution in 22 countries and five continents. Considered one of Brazil's most internationalized and diversified Brazilian food companies, the Group exports products to more than 140 countries. Its clients include the biggest supermarkets and restaurants chains around the world. Voted the best agribusiness company in Brazil by top business magazine Revista Exame in 2010, Marfrig is the largest producer of lamb in South America, the largest meats company in Argentina, the biggest poultry producer in the UK and the top private-sector company in Uruguay.
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