Brazilian meat producer BRF has reduced its net loss to BRL 38 million ($6.63 million) in its first quarter, compared to a loss of BRL 1 billion ($173 million) in the same period last year.
In the quarter, this reduction was driven by an increase of 8% in volume of food sold reaching approximately 1.1 million tonnes, despite the impacts of the Abu Dhabi plant being suspended to export to Saudi Arabia.
BRF claims it has focused its efforts on increasing its presence in retail to offset the foodservice restrictions due to Covid-19, as well as advancing in innovation and product launches.
The company highlighted the performance of its other international markets (non-halal) which grew 46% to BRL 1.7 billion ($292 million).
Its halal market meanwhile, represented about 25% of the total volume sold by the company in the quarter at 277,000 tonnes.
In the three months to 31 March 2020, BRF recorded a 22% rise in net revenue to almost BRL 9 billion ($1.5 billion) driven by commercial execution.
For its Brazil segment, net revenue rose by 18% year-on-year, meanwhile its international segment increased by 25.6%. This was the first quarter after five years, that the USA exported poultry again to the Chinese market due to lifting of the ban.
“In order to defend our position in the market, we ramped up poultry volumes sold in the region, besides adopting a pricing strategy for our pork cuts focused on improving profitability,” said BRF.
Following the outbreak, BRF claims to be working on understanding consumer habits and supply chain trends impacted by Covid-19, while looking for potential acquisitions that may arise in businesses, technology, or processes.
During its results, the firm announced the acquisition of the remaining 25% of Al Wafi Al Takamul International Company and the 100% acquisition for approximately $8 million of Joody Al Shargiva Food Production Factory, both of which are located in Saudi Arabia.
In addition, last year the company signed a memorandum of understanding with the Saudi Arabian General Investment Authority (SAGIA), which will allow the construction and operation of a chicken processing plant in the country.
“Our economic and financial performance this quarter recorded robust growth – for the fourth consecutive quarter – when compared to 1Q19, evidencing a consistent long-term oriented management in a company with a supply chain as long as ours,” said BRF CEO Lorival Nogueira Luz Jr.
According to Reuters, currently BRF’s plant in Lajeado, Brazil is the only one ordered to shut down because of Covid-19.
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