Brazilian food giant BRF SA has reported a net profit of 22.4 million reais (€3.49 billion) in the first quarter of its financial year, undershooting an analysts' consensus estimate of 112.7 million reais (€17.6 million).
This was an improvement on the 38 million-real loss the company reported in the same period last year.
BRF said it sold about 1.1 million tonnes of food products, stable in relation to the year-ago quarter. However, net revenue rose by an annual 18.4% to 10.6 billion reais, driven partly by a 20% rise in prices.
'During this time, we simultaneously faced the worsening of the COVID-19 pandemic in the regions where we operate,' the company said in a statement. 'The pandemic altered product demands, accentuated macroeconomic volatility, and along with other market conditions, increased the cost of raw materials (most notably for grains). However, we were resilient and agile to adapted to these changes while recording consistent and sustainable results.'
Most of BRF's food sales were in Brazil, where the company faces a rise in feed costs that compressed its gross margins last quarter. Economic weakness in Brazil also weighed on sales of processed foods, with BRF reporting a 20% drop in the segment's volumes from the previous quarter.
Internationally, BRF results were bolstered by a 9.6% annual rise in net sales to the Asian market, which totaled 1.5 billion reais. This helped offset a 3.1% fall in volumes sold in that market during the quarter, the company said.
In China, demand for BRF products remained heated for both chicken and pork, with growth of 9% in sales volumes. On the other hand, other Asian markets remained depressed by the effects of the pandemic, BRF said.
According to the BRF earnings statement, the company reported EBITDA of 1.234 billion reais, slightly above a consensus estimate of 1.218 million reais.