Brazil's BRF SA has reported a net loss for the second quarter, as higher grain prices and the lasting effects of the COVID-19 pandemic weighed on the pork and chicken processor.
BRF, the world's largest chicken exporter, reported a total net loss of 240 million reais (€38.9 million) in the period, when it burned more than 2.1 billion reais (€340 million) of cash amid high expenses.
In Brazil, where BRF derives more than 50% of its sales, the company said the quarter was challenging because of persistently high unemployment, loss of income and falling consumer confidence during the pandemic, according to its earnings statement.
BRF sold 570,000 tonnes of products in Brazil. While the company was able to marginally raise sales volumes and prices in its home market from the year-ago quarter, BRF reported an almost 31% annual rise in the cost of products sold.
Overall net margins turned negative at -2.1% last quarter, the company said, significantly lower than in the preceding quarter, when it was 3.4%.
Internationally, sales at its key Halal foods division, showed better prices in dollars, providing some relief. But restrictions enacted by Gulf countries to control the advance of COVID-19 affected volumes negatively. Vaccinations should provide a silver lining going forward, BRF said.
Sales volumes grew in Asian markets, with China as a key market, both in quarterly and annual terms - to 151,000 tonnes. In Asia, the company kept double-digit net margins for the quarter at 15.1%, but that represented a drop from 23.4% in the year-ago period, BRF said.
BRF reported net revenue of 11.6 billion reais (€1.88 billion) last quarter, almost 28% higher than in 2020, reflecting higher average product prices across geographies in annual terms.
In the first quarter of its financial year, the meat processor reported a net profit of 22.4 million reais (€3.49 billion), undershooting an analysts' consensus estimate of 112.7 million reais (€17.6 million).