BRF profits rise on margin, sales growth
BRF earnings gain
BRF has booked higher nine-month profits on the back of improved margins and higher sales.
The Brazil-based food group said EBITDA rose 30.5% to BRL3.08bn (US$1.28bn). Net profit increased to BRL1.2m, up 41.3% year-on-year.
Gains were driven by higher sales, which benefited from changes to the group's Brazilian retail strategy, product launches and a "solid" international performance. Total sales were up 3.1% in the nine-month period, rising to BRL23bn.
The company added its profit profile is "reaping the rewards of the structural review" introduced last year.
"We are eliminating inefficiencies, have become more proficient and are gaining more agility in the decision-making process, through a structured management approach," the company said.
BRF´s net income expands by 117.5% to R$ 624 million in 3Q14
Earnings show EBITDA increased by 61.3% on an annual comparison and a continued deleverage
São Paulo, October 30, 2014 – BRF ended the third quarter of 2014 with net income of R$ 624 million, an increase of 117.5% over 3Q13. EBITDA amounted to R$ 1.2 billion, rising by 61.3% over the same quarter of last year. This performance arose from the management techniques and processes that have been implemented over the last year and highlight the consistency of the Company´s results which have been growing at a fast pace.
The consolidated Net Operating Revenues (NOR) came to R$8.0 billion in 3Q14, an increase of 5.3% compared to the same period of 2013, driven mainly by the Brazilian operations. The initiatives adopted in the Brazilian market are beginning to showpositive results, such as the go-to-market project (GTM) that contributed to raise volumes in this market by 5.2% over 3Q13. There was also a solid performance on the international market with an increase of 3.8% in the NOR, which came to R$ 3.4 billion, over the same period of last year.
The sales performance and better operating conditions led to a fall in the Company´s net debt/ EBITDA ratio, which declined from 1.51 times to 1.40 times on a quarterly comparison and from 2.29 times in 3Q13.
The quarter was also marked by the signing of a binding memorandum of understanding with Parmalat S.p.A., a company belonging to Groupe Lactalis, establishing the terms and conditions for the sale of the dairy business. The deal is awaiting the approval by the Brazilian antitrust authority, known as the CADE. This operation, combined with the sale of two beef slaughtering plants to Minerva, was carried out in line with the Company´s strategy of divesting assets that are not part of its core business. In 3Q14, the Company´s Board of Directors also approved the appointment of Pedro Faria as Global CEO, with effect from January 2, 2015. Pedro has dedicated his efforts during the transition of the command, with the support of the Board of Directors, the current Global CEO, Claudio Galeazzi, and the executive management.
The NOR from Brazilian operations came to R$ 3.5 billion, 8.0% higher than the same period of last year, driven by the growth in volumes and the good performance of the small retail shops. The conclusion of the processes of sales force consolidation in the small retail shops (initial stage of the go-to-market) and the simplification processthrough cuts in the stock keeping units (SKU), as well as the improvement in our service
Original source: BRF
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