Brazilian meat producer BRF has reported a consecutive quarterly loss following the imposition of export bans from the European Union and Russia.
BRF registered a loss of BRL 114 million ($32 million) despite rising domestic sales, partly as a result of the trade bans and the reduction of production capacity at five of its facilities due to an ongoing food safety probe.
The turbulent quarter saw the resignation of the company’s CEO José Aurélio Drummond Jr days after the EU imposed an import ban on poultry products from 12 BRF production facilities.
Despite these factors, BRF’s year-on-year net revenues actually rose 5% to BRL 8.2 billion ($2.3 million) and gross profit rose 11.7% to BRL 1.54 billion ($433 million) compared to the same quarter last year.
However, both figures were down compared to BRF’s last financial quarter, as net revenue fell 7.8% from BRL 8.9 ($2.5 billion) and gross profit fell 15.6% from BRL 1.82 ($512 million).
In a statement, BRF said it has not been notified of the EU’s ban prior to its imposition and would try to reverse this decision, and Brazilian authorities launched an appeal to the World Trade Organisation (WTO) in April to stop the ban.
BRF CEO Lorival Nogueira Luz Jr said: “The performance of the domestic market stood out and more than offset the decrease in international sales, which were negatively affected by the restrictions imposed by Russia and Europe.
“Accordingly, we and Brazilian authorities have been dedicating all our attention to this matter.
“Although BRF has not yet been officially notified of the decision of the European Commission about the exclusion of 12 of its plants from the list of establishments authorised to export chicken to the European bloc, the company has been discussing the matter with the relevant appeal bodies to address the situation, especially with the participation of representatives of the Brazilian Ministry of Agriculture, Livestock and Food Supply and Brazilian diplomats.
“The next quarters will be extremely challenging. Important themes, such as those mentioned above, will influence the results for the year. However, all executives, under the leadership of the new Board
of Directors, are dedicated and motivated to resume our growth track
© FoodBev Media Ltd 2019
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