(Adds details from financial statement, context)
By Ana Mano
SAO PAULO, May 10 (Reuters) - Brazilian food company BRF SA on Thursday reported its second consecutive quarterly loss as the firm reels from a food safety scandal that prompted trade bans and led it to reduce production capacity at five plants.
BRF said it lost 114 million reais ($32 million) last quarter, missing a consensus estimate for net income of 14.99 million reais.
BRF, Brazil’s largest chicken processor, also missed a consensus estimate for earnings before interest, tax, depreciation and amortization, a gauge of operating profit, which came in at 783 million reais, some 7 percent below forecast.
BRF results have been adversely affected by an ongoing food safety probe in Brazil implicating companies and government health inspectors accused of colluding to evade safety and quality checks.
BRF said it had incurred additional charges of 12.8 million reais last quarter to defend itself from the claims, which prompted the Agriculture Ministry to immediately suspend exports from three of its plants.
The company started an internal investigation in connection with the allegations while maintaining its products are fit for human consumption.
Last quarter, BRF said sales volumes increased by 6 percent driven by domestic market demand. This helped offset a fall in overseas sales volumes, which were impacted by trade restrictions imposed by Russia and Europe. Still, net revenues fell 5 percent from the same quarter a year ago, to 8.2 billion reais.
On April 19, the European Union banned imports of Brazilian meat products, mostly poultry, in a move that affected 20 plants that had been authorized to export to the bloc, 12 of which are operated by BRF.
The company said it has not been formally notified of the bloc’s decision and will try to reverse it.
It is unclear whether BRF will be capable of directing any exceeding production capacity resulting from the bans to alternative markets, at similar prices.
The company said average selling prices for some products in some markets fell as a result of the trade bans, a direct result of the food safety probes that started in March 2017.
BRF’s top shareholders last month overhauled the board, a move designed to kick off a turnaround after two years of net losses partially due to mismanagement of feed inventory and fallout from the scandal.
“The next quarters will be extremely challenging,” Chief Executive Lorival Nogueira Luz said in a statement accompanying results. ($1 = 3.5506 reais) (Reporting by Ana Mano Editing by Leslie Adler)