Brasil Foods S.A. (BRF) has announced its earnings, reporting for the first half 881 million real (BRR) of net income. BRF's second quarter operating and financial results continued to record a good performance, also benefiting from the realisation of synergies despite a strong surge in prices of agricultural commodities and the appreciation of the real.

Net sales for the second quarter reached BRR6.3 billion, a year-over-year growth of 13.8 per cent, resulting in a gross profit of BRR1.6 billion, which equates to a margin of 24.8 per cent, 15.6 per cent higher than the second quarter of 2010.

EBITDA posted BRR785.9 million, representing a record margin of 12.5 per cent, a gain of 140 basis points. Net income was up 190.4 per cent, amounting to BRR497.9 million, a net income margin of 7.9 per cent.

Better domestic market performance was mainly driven by processed products, which recorded a growth of 17.2 per cent in revenue. Again, strong demand from markets such as the Far East, Europe and the Middle East were instrumental in the recovery of the results, adding a further 340 basis points to operating margin.

The company reiterated its targets outlined in its 2010 Budget and already announced, forecasting growth of 10 to 12 per cent in net sales as well as planned investments of about BRR1.6 to BRR1.8 billion, These resources will be directed towards the maintenance of operations, replacement of breeder stock and organic growth.

BRF has been consolidating its bases for implementing the Company's international expansion project, diversifying its portfolio, advancing up in the value chain, winning over the most demanding customers around the world. BRF brands are already benchmarks in several important markets.

These foundations, which the company has established, will provide the bedrock for the Long-Term Strategic Plan that is focused on organic growth and on selective overseas acquisitions. The project aims to boost the Company's global footprint with the gradual and consistent objective of creating shareholder value, while mitigating risks and adverse factors and improving results and margins.

The Middle East ranks as one of the regions which is strategic to BRF's international plans. In this context, the Company is announcing investments of approximately US$120 million in the construction of a processed products plant in the United Arab Emirates with a capacity in the order of 80,000 tons per year when fully operational. For further details, click on the link at the end of this news item.

Following the Brazilian anti-trust authority's approval of the merger, BRF has launched a new advertising campaign to boost its corporate image. The campaign will cover all the Company’s areas of operation and carry as its slogan 'When we feed the dream of each Brazilian, we feed the dream of the entire country' and 'Your world with more taste'.

Further Reading

-

You can view the full report by clicking here.