Marfrig reports higher 2Q revenue, lower profit
by Bryan Salvage
SÃO PAULO –Marfrig Group’s second-quarter net profit was 127.4 million Brazilian reals (US$72.5 million), down from R$405.0 million (US$229 million) during the same period last year. The decline was attributed to a one-off gain of R$502.6 million (US$284.5 million) in the 2009 period due to foreign-exchange movements, the company said. Second-quarter revenue was R$3.56 billion (US$2.02 billon), up 48% from the year-ago period.
Earnings before interest, taxes, depreciation and amortization, (E.B.I.T.D.A.) increase to R$286.3 million (US$162.1 million) from R$183.4 million (US$103.8 million).
Marfrig executives said the highlight of the quarter was acquiring U.S. multinational Keystone Foods, one of the world's largest food companies, with more than 28,000 restaurants and 54 operational units in the U.S., New Zealand and Australia and countries in Europe, Asia and the Middle East. After consolidating this business, the Marfrig Group will have 151 units in 22 countries, with 85,000 employees.
Marfrig invested R$95.5 million (US$54 million) during the quarter in the construction, maintenance, modernization and expansion of its plants. Cash flow from investment activities totaled R$188.9 million (US$106.7 million) in the quarter, while capital expenditure, including investments in breeding stocks, came to R$ 137.4 million (US$77.6 million). Excluding the investments in breeding stocks, capital expenditure in the year was R$205.5 million (US$116.05 million).
Marfrig stock ended 2Q10 quoted at R$16.88 (US$9.53) , for a year-to-date gain of 11.7%, which compares with the increase of 11.2% in the Brazil Index (Ibovespa) in the same period. Since January 2009, Marfrig stock has registered a cumulative gain of 125.1%, compared with 62.3% for the Ibovespa. The following chart presents a comparison of the performances of Marfrig stock and the Ibovespa in the period from Jan. 1, 2009, to June 30, 2010.
The liquidity of Marfrig stock continued to increase, with higher financial trading volume and a higher number of trades in the period. In 2Q10, average daily financial trading volume was R$32.9 million (US$18.6 million), vs. R$9.8 million (US$5.5 million) in the same period last year.
Marfrig also registered an increase in the number of shareholders, especially individual investors, which increased from 1,000 in June 2009 to 5,500 in June 2010.