InstaForex InstaForex

BRF: Company Posts R$ 167 Million Loss In 2Q17 Amid Lower Margins

brf: company posts r$ 167 million loss in 2q17 amid lower margins

The Brazilian meatpacker BRF posted a R$ 167 million (US$ 52.69 million) net loss in the second quarter of 2017, from a R$ 31 million net income a year earlier, hurt by small profit margins and the fallout of an investigation about tainted meat in Brazil. Analysts expected a lower net loss in the second quarter, of R$ 132 million.

BRF's net revenue fell 5.7% from a year earlier, to R$ 8.027 billion (US$ 2,532.58), slightly below market expectations, (R$ 8.342 billion). EBITDA (earnings before interest, taxes, depreciation, and amortization) fell 39.1%, to R$ 575 million (US$ 181.42 million), while analysts predicted a less intense decline (26%, to R$ 695 million). The EBITDA margin dropped 3.9 percentage points, to 7.2% in the quarter.

BRF sales volume in the quarter fell 0.2%, to 1,169 million tons. The company's gross margin was at 20.5%, or 2 percentage points (pp) below the margin for the same period in 2016 (22.5%).

In Brazil, sales volume increased 0.1%, to 495 million tons. Net operating revenue in the country fell 0.9%, to R$ 3.534 billion. In Europe and Eurasia, sales volume fell 12.4%, to 89 million tons. Net operating revenues in the region fell 13.4%, to R$ 883 million. In Asia, BRF's third largest market, sales fell 3.8%, to 173 million tons, while net operating revenue in the region fell 13.6%, to R$ 1.090 billion.

At the end of the second quarter, the company's net debt amounted to R$ 13.7 billion (US$ 4.32 billion), or 4.9 times higher than its EBITDA. At the end of the previous quarter, the debt was at R$ 12.243 billion, equivalent to 4.24 times the EBITDA. A year earlier, the debt was at R$ 11.041 billion, or 1.99 times the EBITDA.

The company acknowledged that this level of leverage is well above what it considered to be ideal regarding capital structure (between 2-fold and 2.5-fold) and reiterated that it does not have financial covenants in its debt instruments.

Recommend: Forex News
Estonia PPI Inflation Accelerates In July
2017-08-21 06:41:00 UTC+00 11 hours, 16 min. ago  
Views today: 809 
Thailand's GDP Growth Accelerates In Q2
2017-08-21 05:02:00 UTC+00 12 hours, 55 min. ago  
Views today: 778 
Japan All Industry Activity Recovers In June
2017-08-21 04:41:00 UTC+00 13 hours, 16 min. ago  
Views today: 841 
Belgium Consumer Confidence Unchanged In August
2017-08-21 13:28:00 UTC+00 4 hours, 29 min. ago  
Views today: 746 
New Zealand Net Migration Climbs In July
2017-08-21 04:33:00 UTC+00 13 hours, 24 min. ago  
Views today: 789 

Support and resistance levels

Aug 21 at 17:57 UTC
Start trading with
no risks and investments
With new Start-Up Bonus of $1000
Get bonus
from InstaForex
on every deposit