Minerva Foods, one of Brazil’s largest meat processors, has quantified the potential impact on revenue from President Donald Trump’s tariffs.
Trump exercised his pledge made in July on Wednesday (6 August) to raise import tariffs on Brazilian goods to 50% from 10%, prompting President Luiz Inacio Lula da Silva to request talks with the World Trade Organization.
While some Brazilian products are exempt from the US import levies, meat, poultry and coffee are not.
The same day those increased tariffs went into effect, Minerva Foods issued its second-quarter fiscal 2025 results.
The meat giant said in an accompanying presentation that the impact would amount to an estimated 5% of its net revenue, which based on the full-year 2024 results would equate to around 1.71bn reais ($314.6m), in historical terms.
Minerva Foods booked revenue in 2024 of 34.1bn reais.
“Based on the results of the last 12 months, the company’s consolidated exposure to the US market accounted for approximately 16% of revenue, with Brazil representing around 30% of that exposure,” the company said on Wednesday.
“Therefore, Brazilian exports subject to the new tariff policy may have a maximum potential impact estimated 5% of net revenue.”
However, Minerva Foods explained it may have a certain element of leverage due to its geographical diversity in meat supply to the US.
“The company hereby announces that it accesses the US market through its operations in Brazil, Argentina, Paraguay, Uruguay and Australia.
“It is worth noting that, in line with our geographic diversification strategy, exposure to the US market also takes place through our operations in Argentina, Paraguay, Uruguay, and Australia, allowing the company to maximise its ability to arbitrate between markets, reduce risks, leverage opportunities, and respond efficiently to scenario changes such as this one.”
The Brazilian president said in an interview with Reuters on Wednesday that ‘he saw no room for direct talks’ with Trump at present, in what would amount to a "humiliation".
Lula described US-Brazil relations at a 200-year nadir after Trump tied the new tariff to his demands for an end to the prosecution of right-wing former President Jair Bolsonaro, who is standing trial for plotting to overturn the 2022 election, Reuters reported.
Meanwhile, Minerva Foods said it posted revenue in the second quarter of fiscal 2025 of 13.9bn reais, an 81.6% increase from a year earlier.
The company confirmed in its results presentation that it concluded the acquisition in October of assets in Brazil, Argentina and Chile from meat rival Marfrig Global Foods.
It included 11 plants and a distribution centre in Brazil, a facility in Argentina, and a factory in Chile for a total consideration of 7.5bn reais.
When the proposed asset deal with Marfrig was first announced in 2023, three plants in Uruguay were also included.
However, that part of the transaction was subsequently blocked by Uruguay’s competition regulator, La Comisión de Promoción y Defensa de la Competencia (Coprodec), in May last year.
Minerva Foods then submitted a revised proposal with the antitrust authority in February this year, with the provision to sell one of the factories post conclusion of the deal.
The company said in the second-quarter results presentation that it is still awaiting a response from Coprodec.
Elsewhere in the latest results, Minerva Foods’ EBITDA print almost doubled to 1.3bn reais from 744.6m reais a year earlier, although the margin dipped to 9.4% from 9.7%.
Based on an almost 40% increase in meat volumes, net income surged to 458.3m reais from 95.4m reais.
“Minerva Foods’ strong international footprint remains one of the key pillars of our performance. In 2Q-25, approximately 60% of consolidated gross revenue came from international markets, underscoring our export-oriented strategy and the competitiveness of our South American assets,” it said.
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