BRF's profit in the first quarter shrank by 12%

Despite registering better operating performance in the first quarter, the BRF saw his net profits drop more than 10 percent, amid the pressure arising from expenses of the process of restructuring and higher spending with interest and in corn prices in the futures market.
In the balance sheet released yesterday, the BRF reported a net profit of r $ 315,4 million between January and March, down 12% in comparison with the same interval last year (R $ 358.5 million).
Among the factors that most influenced the fall of profit are financial expenses of R $ 196.5 million, 93.1% larger than in the first quarter of 2013. Most of these expenses derived from interest expenses and with corn prices, essential input, the futures market. Main component of animal feed, the grain is up almost 20% in Chicago this year.
In addition, the BRF is still affected by the changes that are being made in its management, in the framework of the restructuring process started after the arrival of businessman Abilio Diniz to the Presidency of the Board of Directors, a year ago. In the first quarter, "non-recurring" expenses related to the restructuring process amounted to r $ 46 million.
From the operational point of view, the restructuring also influenced the company. In the first quarter, the BRF had a net revenue of R $ 7,339 billion, growth of 1.8% in comparison with R $ 7,209 billion the same range of 2013.
The composition of net revenues already shows signs of the changes made by the new management. During the period, the BRF has managed to expand sales even with the reduction of 7.4% of the volume sold – mostly in exports-, which indicates increased average price of the products. Between January and March, the BRF sold 1.3 million tonnes of products. In the period, 57.3% of the net revenues of the BRF was generated domestically.
In the first quarter, the BRF also raised in 7.1% its earnings before interest, taxes, depreciation and amortization (Ebitda) in the comparison between the first quarters of 2013 and 2014, to R $ 861 million. The company's Ebitda margin also advanced, passing of 11.1% recorded a year ago to 11.7% in the first quarter. During the period, the company generated free cash flow of $ 1.1 billion
With regard to debt, the BRF recorded improvement. On March 31, the company's net debt totaled R $ 5,990 billion, a decline of 11.7% in comparison with the debt of R $ 6,784 billion as the company registered at the end of the fourth quarter of last year. With that, the leverage index (ratio of net debt and Ebitda) of the company stood at 1.88 times, below the 2.17 times in the immediately preceding quarter.
In the balance sheet released yesterday, the BRF also reaffirmed his goal to invest r $ 1.5 billion through 2014. In the first quarter, the company's investments totaled r $ 336 million, down 46.1% compared to the previous year.