Bloomberg — Shares of BRF (BRFS3) reached the highest level since 2022 with a better than expected result in the first quarter. The company, one of the largest suppliers of chicken in the world, reported lower costs and higher prices that led to profits above analysts’ expectations.
The result highlights BRF’s recovery after two consecutive years of losses precisely due to increased costs and excess supply.
Chicken producers around the world are benefiting from a decline in the prices of cereals used in poultry feed, at the same time as consumer demand recovers.
BRF, which sells everything from hams and sausages to frozen pizza, also embarked on a plan to reduce expenses and increase efficiency in its operations.
The share rose 14.7%, to the highest level since February 2022, the biggest gain for the Ibovespa (IBOV).
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O Ebitda adjusted, or earnings before items such as interest and taxes, in the three-month period ending in March more than tripled compared to the previous year, to R$2.1 billion, the company said in a statement. The value exceeded the average of R$1.7 billion in analyst estimates compiled by Bloomberg.
The result was a seasonal record and reflects a change in the company’s fundamentals, said the CEO Miguel Gularte said in an interview. The company said it has seen a price recovery in almost all of its regions.
BRF is controlled by the meat giant Marfrig Global Foods (MRFG3), and counts the Saudi Arabian state fund, Saudi Agricultural and Livestock Investment Co., among its shareholders. Marfrig shares rose up to 10.7%.
BRF’s net debt fell to less than 1.5 times EBITDA, the lowest level in eight years. With the reduction of the debt burden, the company now has the capacity to evaluate growth opportunities, said CFO Fábio Mariano, in the same interview.
Fitch Ratings earlier this month upgraded BRF’s credit rating, citing the prospect of improved demand for chicken.
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