Brazilian food processor BRF SA, the world’s largest chicken exporter, swung back to profit after three quarterly losses on a combination of higher net revenue driven by an increase in sales volume and higher meat prices across geographies.
BRF reported a 191 million reais ($48.74 million) gain, according to a securities filing, while analysts had expected BRF to lose 50.2 million reais in the quarter.
BRF said net revenue rose by almost 18% to 8.33 billion reais in the second quarter.
Its better commercial and operating performance was related to African swine fever in China, a deadly pig disease that disrupted internal meat supplies, increased the need for imports and boosted sales prices.
Going forward, BRF rules out any short-term prospect of recovering meat supplies due to severe disruptions caused by the swine flu outbreak, meaning the outlook for protein prices will remain strong during the second half of the year around the world.
BRF also highlighted its performance in Saudi Arabia, a key market where suppliers face restrictions related to the requirements to sell in halal markets, ones where animals are slaughtered in accordance with Islamic law.
BRF said its halal market sales rose by 12.5% in the quarter thanks to higher selling prices in Saudi Arabia, which enforces strict requirements to certify meat suppliers.
BRF said consolidated average selling prices rose by more than 17% in the second quarter. In Brazil alone, BRF said prices rose by an annualized 30% for chicken and 35% for pork.
The company said adjusted earnings before interest, taxes, depreciation and amortization, a measure of operating profit known as EBITDA, was 1.547 billion reais in the period, nearly double the average analyst estimate of 825.20 million reais.
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