Brazilian meat major BRF has abandoned a plan to sell its pet-food arm more than eight months after announcing the sale.
Publicly-listed BRF said the company’s management has “decided to maintain its pet-food business”, adding that the “competitive sale process” launched in February has been halted.
“As the third-ranked player in the pet-food market in Brazil and leader in super premium natural pet feed, the company will continue to drive growth in this segment by increasing distribution through specialised channels, strengthening [the] brand’s strategy by segment and channel, consolidating integration synergies, and advancing the export expansion strategy,” BRF said in a statement today (13 November).
BRF had hired Banco Santander as financial advisor for the sale of the pet-food business, noting in February that the company had entered early discussions with potential buyers. At the time, Bloomberg sources said a deal could fetch 2 billion reais ($405.5m today).
In 2021, BRF acquired two Brazil-based pet-food makers Mogiana Alimentos and Hercosul.
The company’s pet-food segment consists of BRF Pet, Mogiana Alimentos, Hercosul Alimentos, Hercosul Soluções em Transportes, Hercosul Distribuição and Hercosul International, according to BRF’s 2022 annual report, which did not provide a break down on revenues for the category.
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BRF as a whole reported an 11.3% increase in revenue for the year to 53.8bn reais, with the announcement mentioning the pet-food brands GranPlus and Biofresh. The company said fourth-quarter pet-food sales volumes rose 9.9%.
For the 2022 year, group adjusted EBITDA fell 50.4% to 2.86bn reais. BRF’s net income from continuing operations turned to a 3.09bn reais loss from a 517m reais profit in the previous 12 months. On a consolidated basis, the loss was 3.10bn reais versus a 437m reais profit.
In its second-quarter results issued in August, BRF said pet sales volumes rose 5.3%, which included the lines Super Premium Naturals, Biofresh and Guabi Natural.
Revenue for the quarter fell 5.7% to 12.2bn reais, with adjusted EBITDA down 32.7% at 10.01bn reais.
Net income from continuing operations was a 1.34bn reais loss, compared to a 451m reais loss a year earlier. Consolidated net income was a 1.34bn reais loss versus a 468m reais loss.