Brazil-based meat processor BRF has reported a first-quarter loss of BRL286m (US$91.1m) amid lower sales and costs incurred as the company reacted to the allegations of fraud in the country’s meat sector.

The BRL286m loss compared to a BRL39m net profit in the first quarter of 2016, the owner of the Sadia and Qualy meat brands said.

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BRF’s EBIT slumped from BRL655m in the opening three months of last year to the BRL68m in the first three months of 2017.

The company booked non-recurring charges, including BRL40m related to costs linked to Brazil’s Carne Fraca allegations, including freight, storage, legal and marketing expenses.

Net revenues were down 3.8% at BRL7.81bn due in part to the impact of the Carne Fraca affair, in which a number of meat processors were accused of paying inspectors to overlook unsanitary practices.

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In a joint statement, CEO Pedro Faria and chairman Abilio Diniz described the Carne Fraca allegations as “one of the most challenging episodes faced by the Brazilian agribusiness industry”.

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The probe led the Brazilian government to order the closure of a number of plants, including one run by BRF in the central city of Mineiros. BRF received approval to resume operations at the site on 8 April.

Faria and Diniz said BRF “lost significant volumes” as Carne Fraca led some export markets to restrict meat shipments from Brazil. The company highlighted reduced sales in markets including China, Hong Kong and Mexico.

“We are not happy with the results presented today, with an EBITDA and net income well below expectations. However, we continue to be highly committed to and confident in the solidity of BRF, the quality of our products and brands, the strategy we have been following in recent years, and the reversal of results,” they said.