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Pork processor Brasil Foods reports strong 2011 income

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Brazilian poultry and pork processor Brasil Foods ended 2011 reporting strong earnings. The company exceeded forecasted growth in net operating revenue and investments despite the turbulent economic environment.

The Brazilian meat giant reported a net income of 1.6 billion reais (US$879 million) for the past year, which equals an increase of 97% compared to 2010.

Net sales for 2011 were 25.7 billion reais (or US$14 billion), a 13.3% increase over 2010. Brasil Foods attributed the gain to a strong performance in the domestic meat, food-services and export markets.

Production costs
Production costs came under extreme pressure during the year due to the increase in raw material prices – in Brazil, corn prices rose 37.5% and soybeans, 14.7%, while on the international market increases were 59% and 25.9%, respectively.

However, the company’s strategies which focused on the increase in productivity, sales efficiency, price and cost management policy as well as investments in innovation were instrumental in minimising the effect of rising commodity prices.

Fourth quarter
Net adjusted fourth quarter income decreased 6.7% to 336 million reais (US$184.7 million). The company said that this decline is related to narrower margins on export business during the quarter.

Fourth quarter net sales were 7 billion reais (US$3.8 billion), a 10.9% year-on-year increase. Revenu in Q4 in the food services area advanced 10% with an operating margin of 16.8%, Brasil Foods said.

Brasil Foods was created in 2009 after the merger of Brazilian meat processing giants Perdigão and Sadia.

Related website:
Brasil Foods

by Vincent ter Beek

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