Brasil Foods has posted an increase in third-quarter profits, on the back of an improved performance in its meat business and cost savings from the merger that created the company.

The Brazilian food group yesterday (27 October) reported a 73% jump in net income for the three months to the end of September to BRL365m (US$213.4m).

EBITDA was up 17% to BRL723m. The group posted net sales of BRL6.29bn, up 10% on the same period last year, mainly driven by sales to the domestic market.

In Brazil, net sales increased 14% due to higher sales of industrialised and frozen products. Exports were up 6% with a “good performance” in Far East, Europe, the Middle East and the Americas, which offset a Russian trade embargo. 

Meanwhile, volumes of meat, dairy products and other processed products fell 3.8%, due to a 6.3% drop in export volumes, which was a reflection of the Russian trade embargo. 

However, meat production increased 8.5%, compared to the same quarter last year.

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For the nine months from January to September, Brasil Foods reported net income of BRL1.25bn, surging 181% from the same period last year. EBITDA grew 39% to BRL2.33bn. Net sales climbed 14%, reaching BRL18.61bn.

Brasil Foods said its outlook for the fourth quarter is based on growing demand for food products in Brazil and demand for festive products. The company said this should “boost sales” and returns for the quarter.

Brasil Foods was created after a merger between two Brazilian food companies, Perdigao and Sadia. The deal was first signed in 2009 but the transaction finally received formal approval from Brazil’s competition authorities in July.

Alongside the third-quarter results, Brasil Foods also outlined the cost savings it expects to generate from the deal. It said synergies before tax and participations is at around BRL560m for this year, BRL740m for 2012 and BRL1bn for 2013, which the company said will be achieved with additional investments amounting to BRL700m.