Brazil's BRF reports Q2 net loss of 167 mln reais on food scandal fallout (BRFS3)

 

Reporting by Ana Mano; Editing by Sandra Maler and Lisa Shumaker, Reuters

via Business Insider - Aug. 10, 2017

 

SAO PAULO, Aug 10 (Reuters) - Brazil's food processor BRF SA on Thursday reported a wider-than-expected net loss of 167 million reais ($52.60 million) in the second quarter, as it continued to reel from the effects of a food safety scandal, it said in a securities filing.

 

The result marks a reversal of a 31 million reais profit from a year ago and is the third consecutive quarterly loss posted by the company.

 

BRF's production was disrupted by a federal investigation announced on March 17 that accused Brazilian sanitation inspectors and companies of conspiring to evade safety checks.

 

Management had warned that the meat safety scandal would have lasting effects. In the second quarter, net operating revenues fell by 5.7 percent to 8 billion reais on an annual basis, BRF said.

 

As part of the investigation, BRF's Mineiros plant was closed and two of its executives were among 60 people charged with taking part in the scheme. The plant was eventually reopened on April 8, but the probe resulted in several key importers of Brazilian meat, ranging from China to Europe, suspending purchases temporarily.

 

"The beginning of the second quarter was marked by low volumes due to the 'Weak Flesh' probe, especially in international markets," BRF said.

 

The effects of the probe were partly mitigated later in the quarter, with volumes recovering in May and June, the company said.

 

The quarterly loss was larger than the 88 million reais forecast in a Reuters consensus estimate. Earnings...

 

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