Company update: Brasil Foods secures profit rise
Brasil Foods SA posted better-than-expected third quarter profit on higher domestic sales and increased prices.
Net income rose to 365 million reais ($213 million), or 42 centavos a share, from 211 million reais, or 24 centavos, a year earlier, Sao Paulo-based Brasil Foods said in a statement.
Net sales climbed 10% to 6.29 billion reais in the quarter, while exports rose 6% to 2.47 billion reais. The company’s margin on earnings before interest, tax, depreciation and amortization increased to 11.5%, from 10.8%.
Despite a broader slowdown in Latin America's largest economy, Brasil Foods' sales growth remained robust in the third quarter due to the 40 million Brazilians who joined the middle class since 2003, migrating to a meatier diet.
Formerly known as Perdigao, Brasil Foods agreed to buy Sadia in 2009 after the rival booked more than 3 billion reais of wrong-way currency bets the prior year.
The company expects another 1 billion reais in cost savings between 2012 and 2013 now that it can complete integration of its units. To successfully integrate the operations, the company planned to invest 700 million reais from this year through 2013 in feed, processing and logistics units.
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