Brasil Foods net income down in first quarter 2012
Key export markets continue to bring challenges
Brasil Foods reported a net income of R$153.2 million (US$81.2 million) in the first quarter of 2012, down from R$383 million (US$203 million) during the same time in 2011 and reflecting challenges in the overseas markets, according to the company's latest financial report.
The company's export market proved difficult, maintaining a trend that began in the fourth quarter of 2011, said Brasil Foods' report. Some key markets, such as Japan and the Middle East, continued to suffer from a process of adjustment and running down of levels of inventory and merchandise flows. Export revenues in the quarter were R$2.4 billion (US$1.27 billion), practically unchanged as compared with the same quarter in 2011.
Chicken meat exports amounted to 974,000 tons in the first quarter of 2012, 6.8 percent lower than in the fourth quarter of 2011 but 4.4 percent up on the first quarter of 2011. In terms of export revenue, there was a decline of 14.9 percent against the fourth quarter of 2011 and an increase of 1.1 percent versus the first quarter of 2011. Shipments to Japan, Venezuela and Iraq registered the largest declines in the quarter. On the other hand, sales volume to Hong Kong, China and Egypt reported substantial increases in the same period, according to the company. Among exported products, volumes of chicken cuts posted the best performance in the first quarter of 2012 (increase of 12.8 percent versus the first quarter of 2011 and of 0.7 percent versus the fourth quarter of 2011), with consistent growth in the markets of the Middle East and Africa.
Looking ahead, export margins are expected to rebound in coming quarters, said CFO Leopoldo Saboya. Brasil Foods also expects its debt rating to be raised to investment grade, allowing it to sell debt more frequently at lower costs, said Saboya.