Marfrig CEO said meat giant was pushing on with strategy

Marfrig CEO said meat giant was pushing on with strategy

The chief executive of Brazilian meat giant Marfrig has looked to the group's future as a global food company even after it recorded losses of BRL746m (US$411.6m) in 2011.

Marfrig CEO and chairman Marcos Antonio Molina dos Santos said the company was "advancing" its strategy of building a portfolio of "higher value-added" products with an "increasingly more integrated and aligned" business.

His comments came after Marfrig saw finance charges and losses due to foreign exchange lead it to record a loss for the fourth quarter of 2011 and the year as a whole.

Marfrig booked a net loss of BRL746.1m for 2011, compared to a net profit of BRL146.1m. The loss came despite a 37.8% increase in net operating revenue to BRL21.88bn and a 20.8% rise in gross profit to BRL3.14bn. Gross margins fell by 200 basis points to 14.4% due to a jump in raw material costs. Adjusted EBITDA, which excluded the charges that affected net income, increased 27.2% to BRL1.6bn.

In the fourth quarter, Marfrig generated a loss of BRL138.6m, against a profit of BRL161.1m a year earlier. However, net operating revenue was up 8.8% at BRL5.79bn. Gross profit increased 4.3% to BRL888.6m, although Marfrig's gross margin fell 60 basis points. Adjusted EBITDA rose 9.4% to BRL520m.

"Marfrig's results in the fourth quarter of 2011 reflect the success of its long-term strategy and consolidate it as global food company with a strong focus on results and the sustainability of its business. The quarter's strong performance was driven by the integration of divisions, the focus on the core business and operational efficiency, the capture of synergies at Seara and the higher sales of processed products, which led us to record-high net revenue of BRL5.79bn, with EBITDA margin increasing to 9% and operating cash flow of BRL703.9m," dos Santos said.

"We are advancing our strategy to build a complete portfolio of higher-value added products, brands with strong customer loyalty and a global platform for developing, producing, marketing and distributing food products through a structure that is increasingly more integrated and aligned."