Marfrig 2Q net income slips despite higher revenue

by Bryan Salvage
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SÃO PAULO, Brazil – Marfrig Alimentos S.A. announced for its second quarter ended June 30, net income of R91 million (US$56 million) vs. R103.8 (US$63.8 million) for the second quarter of 2010. EBITDA was R$277.8 million (US$170.6 million) , up 9.7 percent from R$253.2 million (US$155.5 million) in 2Q10 but declining 17.7 percent from R$337.3 (US$207.2 million) million in 1Q11. Net revenue totaled R$5.32 billion (US$3.27 billion), up 49.6 percent from R$3.56 billion (US$2.19 billion) in 2Q10 and 1.3 percent from R$5.25 billion (US$3.22 billion) in 1Q11.

Beef exports accounted for 23.7 percent of Brazil's total beef exports in 2Q11, versus 20.7 percent in 1Q11 and 15.7 percent in 2Q10. Poultry exports also posted a strong performance, growing to account for 23.1 percent of Brazil's total poultry exports in 2Q11, versus 22.7 percent in 1Q11 and 19.9 percent in 2Q10.

Marfrig said it expanded product lines with new launches of value-added products in order to gain market share.

"The second quarter continued to pose the challenging environment seen since early 2011, with a weaker US dollar and high grain and livestock prices set against the backdrop of the financial scenario in Europe and the US, which continue to show signs of economic stagnation,” said Marcos Molina dos Santos, CEO and chairman. “Despite this adverse operational environment, Marfrig worked to improve its cash flow by reducing its use of working capital, maintaining a high cash balance and improving its debt profile, with the percentage of short-term debt falling to 22.7 percent, from 29.6 percent in the previous quarter.

The Marfrig Group is one of the largest global food companies offering beef, pork, poultry and fish products. Its operating base is comprised of production, commercial and distribution units, which are based n 22 countries on five continents. Considered one of the most international and diversified Brazilian food companies, its products are present in more than 140 countries. Employing approximately 90,000 employees, the Marfrig Group is the largest sheep producer in South America, the largest beef company in Argentina, the largest poultry producer in the United Kingdom and the largest private company in Uruguay and Northern Ireland.
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