Brazilian meat processor BRF SA posted fourth-quarter net income of R$902 million (€134.2 million), beating analysts' expectations on the back of strong demand from China and its home market.
The strong quarter boosted 2020 earnings to R$1.39 billion (€210 million), helping the world's largest chicken exporter turn a profit for the second year in a row.
Net revenue for the quarter surged 23.5% to R$11.4 billion (€1.7 billion) as BRF raised the average price of its products in both international and domestic markets.
Net profit surpassed analysts' forecasts of R$572.03 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) were in line with estimates of R$1.496 billion.
Overall sales volumes rose 2.2% year-on-year to nearly 1.2 million tonnes. Processed foods account for most of the company's sales in Brazil, while it sells more fresh chicken and pork internationally.
Performance By Geographies
As in the third quarter, BRF derived more than half of its sales in Brazil, where revenue rose 25.8% and consumption of more expensive food items in its portfolio helped offset higher grain prices and pandemic-related costs.
In China, sales volumes soared 44% and prices, translated into reais, rose by 16%, BRF said.
On a negative note, the company burned R$1.5 billion of cash, more than 1,200% up from the same period in 2020, driven by higher inventory and accounts receivables.
In the key halal markets of the Middle East, volumes sold remained stable amid effects of the pandemic and slower production in Turkey, where it sells the leading Banvit brand.
However, the halal division's net revenues jumped 32% to R$1.9 billion in the quarter, bolstered by a weak Brazilian currency.