February 23, 2018 / 12:54 AM / 4 months ago

UPDATE 1-Brazil's BRF swings to 4th-qtr loss on write-downs, export challenges

(Updates with reasons for losses, context)

SAO PAULO, Feb 22 (Reuters) - Brazil’s BRF SA swung to a loss in the fourth quarter, missing a consensus estimate for a profit, as the food processor wrote down unsold inventory and faced a difficult market for its exports to Europe and Asia.

Brazil’s largest chicken exporter reported a net loss of 784 million reais ($241 million) in the fourth quarter. Adjusted earnings before interest, tax, depreciation and amortization, a gauge of operating profitability, came in at 645 million reais, below the consensus estimate of 1.14 billion reais.

In a statement filed with securities regulators on Thursday, BRF said it booked a 206 million reais loss related to inventory and booked a 50 million reais loss related to tax changes in Argentina.

BRF said improved sales of seasonal products in Brazil were offset by lower prices of products exported to Japan and lower volume of sales to Europe.

The company posted a 1 billion reais loss last year, as it dealt with fallout from the “Weak Flesh” food safety scandal in which Brazil food inspectors allegedly accepted bribes.

The scandal resulted in plant closures, export restrictions and an ensuing management shakeup at BRF. In November, BRF named a new chief executive officer, José Drummond, to lead a turnaround, replacing Pedro Faria.

Starting in the final quarter of 2016, BRF had reported three consecutive quarterly losses and only returned to profit in the third quarter of 2017.

Reporting by Tatiana Bautzer; Editing by Sandra Maler and Leslie Adler

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