By Ana Mano
SAO PAULO (Reuters) -BRF SA, the Brazilian pork and poultry processor, widened its third-quarter loss from the year-ago period as it continued to deal with a chicken oversupply while also trying to rein in grain prices, it said on Monday.
BRF reported a 262 million real ($53.37 million) net loss in the third quarter, larger than the 136.7 million loss a year ago but slightly better than an LSEG consensus forecast of a 279 million real loss.
Despite the hit, BRF said improvements in the company’s operating performance were already showing results.
Management hailed a double-digit earnings before interest, tax, depreciation and amortization (EBITDA) margin of 11.9%, “close to historical profitability levels,” despite price pressure in the fresh meat segment.
BRF also said net revenue was 13.8 billion reais in the quarter, nearly the same as in the year-ago period.
Regarding recurring cost pressure from corn, which is used as animal feed, management said the worst may be over.
“This quarter, the drop in the cost of grains begins to impact the company’s results as we had predicted,” said CEO Miguel Gularte in a statement accompanying the results.
“Our predictive models, as well as the grain purchasing strategy, are a competitive differentiator for BRF and are proving to be highly efficient,” he added.
BRF’s results, however, still reflect the pain of dealing with a global chicken oversupply, which depressed prices in some markets and affected the sector in general, including rivals like JBS SA.
In comments to reporters, management said chicken production has shown signs of slowing in large suppliers like the U.S. and Brazil, while on the demand side, prices are recovering in some markets, bolstering the company’s export prospects.
BRF said EBITDA came in at 1.2 billion reais ($244.45 million), slightly above LSEG consensus estimates of 1.17 billion reais.
($1 = 4.9089 reais)
(Reporting by Ana Mano; Editing by Kylie Madry)
