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News and analysis on the global poultry
and animal feed industries.
on March 23, 2012

Brasil Foods reports net income up 97 percent for 2011

Fourth-quarter numbers down due to narrow margins on export business

Global poultry exporter Brasil Foods reported a net income of R$1.6 billion (US$877.9 million) in 2011, up 97 percent from 2010 numbers, according to the company's latest financial report.

The company exceeded forecasted growth in net operating revenue and investments despite the turbulent economic environment which permeated the international market throughout the period, according to the statement. Production costs came under extreme pressure in 2011 due to the increase in raw material prices — in Brazil, corn prices rose 37.5 percent and soybeans rose 14.7 percent, while on the international market increases were 59 percent and 25.9 percent, respectively. However, Brasil Foods' strategies, which focused on increases in productivity, sales efficiency, price and cost management policy, as well as investments in innovation, were instrumental in minimizing the effect of rising commodity prices, according to the company.

Net adjusted income for Brasil Foods' fourth quarter 2011 was R$336 million (US$184.4 million), down 6.7 percent due to narrower margins on export business during the quarter. Margins were squeezed due to the reduction in prices and demand in the Japanese and Middle Eastern markets, the two areas where inventories were highest. In addition, a strike in Itajaí at the beginning of the quarter obliged the company to divert export shipments to other Brazilian ports.

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