Marfrig reports solid financial results in tough market
A host of global challenges, including the economic slowdown in China, falling oil prices and a complex political situation in Russia, forced the International Monetary Fund (IMF) to downgrade its GDP export growth forecast to 3.1%. Despite the raft of market challenges, Marfrig has reported a “solid" operating performance” for its fourth-quarter results for 2015.
Pre-tax profits rose to BRL5.2bn ($1.3bn) in the last quarter of 2015. This helped net income rise by 18.5%, according to Marfrig, which is one of Brazil’s largest meat processing companies alongside JBS and Brasil.
Lean and focused
“The year was marked by the restructuring of our operations and the assets divestments, turning us into a leaner and more focused company, while maintaining its global and diversified footprint,” the CEO Martin Secco said in a statement. “The commitment of the team to add value throughout the chain and to adjust the operational structure is reflected in the results delivered. For the third consecutive year, Marfrig delivered the targets it had set.”
To consolidate the company’s global position in the market, Marfrig sold Moy Park to its rival JBS in a deal worth $1.5bn (BRL6bn). At the time of the deal in June, a spokesman for Marfrig said the sale would help the company “focus more intensely on pursuing growth opportunities”.
The Moy Park sale took place in June and it is still too early to see the full benefits of the company’s consolidation in the market. But Marfrig said the business was a much leaner operation now, with its two business units, Keystone and Marfrig Beef, both contributing around 50% of global revenue in the last quarter of 2015.
Uruguay underperformsKeystone provides leading retailers and foodservice providers with poultry, beef, pork and fish. The brand posted adjusted net profits of $61m (BRL244m) in the last quarter of 2015.
Marfrig Beef, reported its net income of $72.9m (BRL292m), a fall of around 3.1% when compared to the fourth quarter in 2014. The company said the strong performance of its operation in Brazil was dragged down by poor sales in Uruguay.
