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http://www.businessweek.com/news/2013-03-28/marfrig-posts-bigger-loss-than-forecast-after-feed-costs-jumped

Bloomberg News

Marfrig Posts Bigger Loss Than Forecast After Feed Costs Jumped

March 28, 2013

Marfrig Alimentos SA (MRFG3), Brazil’s second-largest foodmaker, posted a fourth-quarter net loss that was higher than analysts expected after the cost of feeding its poultry and hogs jumped.

The net loss of 284.2 million reais ($141 million), or 60 centavos a share, compares with net income of 10.4 million reais, or 3 centavos, in the previous quarter, the Sao Paulo- based company said in a regulatory filing late yesterday. Marfrig was expected to post a loss of 63 million reais excluding one-time items, the average of nine analysts’ estimates compiled by Bloomberg.

Marfrig doubled its processed-food capacity after the acquisition of plants from BRF - Brasil Foods SA (BRFS3) last year amid increasing prices for corn and soybeans used to feed its livestock. Average corn prices in the quarter rose 18 percent from a year earlier in Chicago, while soybeans advanced 26.

It was a “tough year-end” for Marfrig’s food-processing Seara Foods unit, Alexandre Miguel, a Sao Paulo-based analyst at Itau Unibanco Holding SA (ITUB4), said in a note to clients before earnings were released. Seara Foods accounts for about 70 percent of total sales.

Brasil Foods is Brazil’s largest food maker.

To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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