Perdigao S.A. (OTC Bulletin Board: PDGOY), one of Brazil’s food companies, today reported first half 2000 net income up 7.4 percent to R$ 11.3 million. Consolidated sales came to R$ 934.7 million, representing growth of 14.8 percent under Corporate Law.
The performance drivers for the half were a 23.1 percent increase in the volume of meat sales, and even higher sales of other processed products such as ready-to-eat dishes (pastas, pizzas, etc.) that have become increasingly significant factors in Perdigao’s financial results.
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“Despite our favorable numbers, the Company’s results for the six months were held in check by lower prices, especially in the export markets, and higher costs for our main raw materials — corn and soybeans — which remained at levels above those of last year, squeezing margins of the sector”, Chief Financial Officer Wang Wei Chang said.
Total investments during the six-month period reached R$ 126.2 million, directed mainly to the Buriti Project, in Rio Verde, Goias state, to the acquisition and expansion of Frigorifico Batavia, and modernization and enlargement of the Lages plant in Santa Catarina state, where frozen ready-to-eat pasta production lines are being installed.
Domestic and Export Market
Perdigao’s sales in the domestic market during first half grew by 24.7% compared to the previous year, reaching R$ 702.4 million. Sales volume in the meat segment increased 25.8% to 208,100 tons. The growth derived mainly from new investments in Perdigao’s industrial units in the South of Brazil, and by the acquisition of Batavia in April 2000.
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By GlobalDataSales in the frozen ready-to-eat pasta segment grew 210% compared with the first half of 1999, demonstrating the growth potential of high added value products.
The Company’s continuing market share gains were attributed to investments in improving and diversifying its product mix. AC Nielsen reported that for the May-June period, Perdigao attained leadership in specialty meats, with a market share of 22.7%.
During the April-May period, Perdigao ranked second in the frozen meats segment with 32.5% of the market. In ready-to-eat dishes and frozen pastas, a market in which Perdigao has been operating for only two years, the Company’s market share gained 400 basis points during the April-May period, rising from 29.5% to 33%, thanks to the launch of dishes such as spinach lasagna, “rondellini”, and pizzas, among others.
Total export volume increased 18.7% during first half, although revenues declined 7.5% as a consequence of changes in the market since the devaluation of the Real, when exports denominated in US Dollars began to suffer price decreases.
Mr. Chang said the recovery in prices over the last months was still minimal, although he foresees a substantial recovery during the next period.
(Note: Certain statements in this Press Release are “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995.)
Perdigao S.A. is a leading Brazilian producer and processor of high quality poultry and pork products, and has a Level I ADR Program in the US.
PERDIGAO S.A. CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE, 30 2000 AND 1999
In thousand of Brazilian Reais, by Corporate Law
BALANCE SHEET
2000 1999
ASSETS 1,935,104 1,651,111
Current Assets 836,189 746,815
Cash and banks 4,239 9,532
Temporary cash investments 404,518 356,761
Trade accounts receivable 122,239 108,836
Inventories 257,500 222,612
Other receivables 47,693 49,074
Noncurrent Assets 229,282 237,671
Securities 176,075 213,476
Other receivables 53,207 24,195
Permanent Assets 869,633 666,625
Investments 5,976 480
Property, plant and equipments 824,258 637,055
Deferred charges 39,399 29,090
LIABILITIES 1,935,104 1,651,111
Current liabilities 890,960 670,926
Bank loans, export advances
and debentures 707,231 531,559
Suppliers 105,458 67,345
Payroll and related charges 61,217 51,720
Others 17,054 20,302
Long-term liabilities 495,019 487,647
Bank loans, export advances
and debentures 388,292 420,176
Taxes and benefit obligations 15,592 8,452
Reserves for contingencies 91,135 59,019
Minority interest 14,831 --
Shareholders' Equity 534,294 492,538
Capital stock 415,433 415,433
Capital reserves 108,251 66,739
Retained earnings 10,610 10,366
PERDIGAO S.A. CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE, 30 2000 AND 1999
In thousand of Brazilian Reais, by Corporate Law
CONSOLIDATED STATEMENTS OF INCOME
2000 1999
Gross Sales 934,655 813,976
Domestic sales 702,369 563,051
Exports 232,286 250,925
Sales deductions (134,099) (100,382)
Net sales 800,556 713,594
Cost of sales (626,046) (494,101)
Gross profit 174,510 219,493
Operating Expenses (146,256) (132,869)
Selling (130,013) (117,761)
Administrative (12,964) (12,006)
Management compensation (3,279) (3,102)
Operating income before financial expenses 28,254 86,624
Financial expenses, net (19,849) (77,052)
Other operating results 3,888 846
Income from operations 12,293 10,418
Nonoperating income 4,003 (1,627)
Income before taxes 16,296 8,791
Provision for taxes (5,066) 1,687
Income before minority interest 11,230 10,478
Minority interest 22 --
Net income 11,252 10,478
EBITDA 53,575 108,735
