Brazil-based meat giant Marfrig has swung to a loss in its third quarter due to interest expenses and costs linked to this summer’s acquisition of Keystone Foods.
Marfrig yesterday (16 November) posted a quarterly net loss of BRL30.9m – against net income of BRL200.5m generated in the third quarter of last year.
Marfrig blamed “higher financial expenses generated by the increase in accrued interest and by marking to market of hedge protection to the payment in the US dollars-denominated acquisition of Keystone Foods”.
The same factors hit Marfrig’s operating profit. The company posted an operating loss of BRL53.2m during the third quarter, compared to operating income of BRL274.9m a year ago.
However, the Moy Park owner’s adjusted EBITDA was up 38.7% at BRL282.6m. Net sales jumped 60.5% to BRL3.86bn.
Marfrig CEO and chairman Marcos Antonio Molina dos Santos said this year’s third quarter had seen “progress” in the company’s “transformation” into a global food company, pointing to the completion of the Keystone deal and the acquisition of Northern Ireland’s O’Kane Poultry.
He said: “Our challenge is to continue integrating the acquired companies and capturing all the synergies from these operations. In addition, the still-slow economic recovery and capturing all the synergies from these operations.”
Looking ahead, the Marfrig boss added: “The still-slow economic recovery in certain countries, the difficulties caused by volatility in the US dollar exchange rate and the adverse industry conditions in certain markets where the company has operations should continue to produce a challenging scenario in the fourth quarter of 2010 – with these markets expected to gradually recover starting in 2011.”