August 10, 2018 / 1:26 PM / 2 months ago

UPDATE 2-Brazil's BRF posts heavy loss on trucker strike, trade bans

(Adds management comments related to asset sales, trade bans)

By Ana Mano

SAO PAULO, Aug 10 (Reuters) - Brazilian food processor BRF SA posted a wider-than-expected quarterly loss on Friday, hit by a nationwide trucker strike and trade embargoes triggered by allegations it had bribed food inspectors.

In its first results after a management shakeup, BRF lost 1.574 billion reais ($411 million), almost three times more than the average analyst forecast and its third straight quarterly loss.

Charges related to BRF’s role in ongoing food sector probes totaled 288 million reais in the second quarter, the company said. As part of the “Weak Flesh” probe kicked off last year, police accused scores of health inspectors and meatpacking executives of colluding to evade safety checks.

The company also reported a direct loss of 75 million reais related to an 11-day truckers strike in May, which poultry and pork producer group ABPA said halted production at 167 processing plants in Brazil. The sector estimated overall losses related to the stoppage at 3 billion reais, BRF said.

Those charges, along with other one-off expenses related to a corporate restructuring and debt management, led BRF to report an operating loss of 289 million reais before interest, taxes, depreciation and amortization in the quarter.

Excluding those one-time items, BRF said its operating profit would have fallen 47 percent to 373 million reais.

Trade embargoes imposed after the food sector scandal hurt results, management said, citing the European Commission’s decision to ban imports from 12 BRF meat processing plants.

“We already filed an appeal with the European Commission Court of Justice and are awaiting the decision,” BRF said.

Still, executives warned on a call with analysts on Friday that reversing the ban will be difficult in the short term.

BRF’s international division reported a 14 percent drop in sales volumes due mainly to trade bans imposed by the EU and Russia, which banned pork and beef from Brazil in December.

As part of a broad corporate restructuring, BRF put assets in Argentina, Europe and Thailand on sale, hoping to raise 5 billion reais to cut debt, a commitment which the company reiterated on Friday.

BRF said there are potential bidders for all of its Argentine assets. Management declined to say if it would divide up the assets, which include businesses selling poultry and processed food products as well as a beef slaughtering unit.

$1 = 3.8340 reais Reporting by Ana Mano; Editing by Christian Plumb, David Gregorio and Chris Reese

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below