SÃO PAULO, Brazil – Marfrig Global Foods SA recently confirmed plans to sell more assets as the company continues to chisel away at its debt. The announcement comes following the company’s sale of its European food unit, Moy Park.
The company said it is in negotiations to sell assets in Argentina and its Marfood beef jerky assets in the United States. “The decision reflects the company’s commitment to focus more on the food service channel and on Keystone, through consistent growth in the APMEA region and in key accounts,” the company said in its earnings announcement.
The divestitures are part of the Marfrig’s plan to reduce its debt up to $1.2 billion by the end of 2016, the company explained. The company also launched a bond tender valued at $703 million. Additionally, Marfrig said the company expects annual savings in interest expenses of $34 million following the company’s repurchase of $406 million in senior notes.
For the third quarter, Marfrig reported net income of R$186 million ($49.27 million) despite a gain of R$1 billion ($264.88 million) related to the sale of Moy Park. The company also saw its earnings hurt by a 28 percent devaluation of the real against the US dollar that totaled R$538 million ($142.51 million).
Net revenues at Marfrig’s Keystone unit advanced 12 percent to $697 million compared to the year-ago quarter. The company attributed the result to growth in sales volume in the APMEA region led by China, Thailand and Malaysia. Solid poultry volume growth in the QSR channel led revenue growth in the US; and the 25 percent increase in global key accounts volumes and sales continued Keystone’s track record of double-digit growth as Marfrig focuses more efforts in this area.