- Marfrig H1 net profit dented by FX, finance costs
- Adjusted EBITDA growth accelerating in YTD
- "Strong" sales growth
Brazilian meat group Marfrig booked an increase in first-half losses due to higher financial expenses and losses from foreign exchange.
The company said its second-half net loss increased to BRL577m (US$166.8m), up from BRL151m in the same period of last year. Higher finance expenses and losses on currency exchange hit the bottom line, Marfrig revealed.
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However, the company is taking steps to improve its balance sheet. During the quarter, the group entered into a deal to sell its UK subsidiary, Moy Park, to BRF for US$1.5bn. "The proceeds will be used to reduce the group’s debt, thereby improving our capital structure and significantly accelerating the planned reduction in our financial leverage," Marfrig said.
Despite lower earnings, Marfrig flagged improving second-quarter margin trends, with year-on-year EBITDA growth accelerating from the first quarter. The company said adjusted EBITDA rose 41% in the second quarter to BRL560m versus the prior year period. In the first quarter Marfrig said adjusted EBITDA increased 14%. The acceleration reflects Marfrig's work on margins, with EBITDA margin growth "at all business units".
For the first half as a whole, adjusted EBITDA rose 27.6% to BRL1.02bn.
The company also reported higher first-half sales, which rose from BRL2.43bn to BRL2.77bn.
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