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UPDATE 1-Brazil's BRF pledges smarter management after steep loss
February 24, 2017 / 2:40 PM / 9 months ago

UPDATE 1-Brazil's BRF pledges smarter management after steep loss

(Adds details of earnings, comments from executives)

By Paula Laier and Brad Haynes

SAO PAULO, Feb 24 (Reuters) - Brazilian food processor BRF SA, the world’s largest poultry exporter, said on Friday it was overhauling management protocols to avoid repeating mistakes that triggered a big quarterly loss.

Chairman Abilio Diniz and Chief Executive Officer Pedro Faria told analysts a lack of real-time information and miscommunication between industrial and commercial divisions had left the company with elevated inventories that must now be liquidated.

BRF shares fell as much as 4 percent to a three-year low in early trading before halving losses to 2 percent at 39.84 reais.

In a securities filing late on Thursday, the company reported a fourth-quarter loss of 460 million reais ($150 million) compared with a year-earlier profit of 1.4 billion reais. It cited a spike in feed costs and stiff competition in several markets.

“In a genuine effort to preserve profitability, we lost perspective of the bigger picture,” Faria said.

Diniz said he was leading a new steering committee to help the company respond faster to market shocks like it saw in 2016.

“We’re working to correct the mistakes that we made,” he said, denying rumors that his family’s investment vehicle would sell its stake in the company.

Diniz said he could not guarantee short-term results, but there were strong signs of a recovery in overseas markets and Brazil, which has had two years of severe recession.

$1 = 3.10 reais Reporting by Brad Haynes and Paula Laier; Editing by Lisa Von Ahn

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