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BRF Records Net Income from Continuing Operations of R $ 446 Million and Free Cash Generation of R $ 1.4 Billion in The 3rd Quarter 2019

Company achieves positive result for second consecutive quarter and announces new leverage target for 2019


BRF, one of the largest food companies in the world, posted net income from continuing operations of R $ 446 million in the third quarter of 2019. The positive performance is a result of the discipline in executing the Company’s strategic planning, with significant advances in markets. Brazil and Asia, as well as better financial management in the period.

“We have two consecutive quarters of profit, solid margins and cash generation that helped us reduce our debt at a faster pace than initially planned. We still have a lot to do, but these are results that help consolidate our financial recovery, reinforce our strategy and allow us to think about long-term growth, ”says Lorival Luz, CEO of BRF.

Operating results showed improvement in the last quarter. The Company’s net revenue totaled R $ 8.5 billion in 3Q19, an increase of 8.4% over the same period last year. As a result, adjusted EBITDA reached R $ 1.6 billion and the adjusted EBITDA margin, which measures the Company’s operating efficiency, reached 19% - an increase of 11.6 percentage points when compared to the same period of the previous year. Excluding the tax gain related to the exclusion of ICMS from the PIS / COFINS tax base, Adjusted EBITDA would total R $ 1.1 billion, almost double the amount recorded last year. Consolidated net income reached R $ 304 million, including the effect of discontinued operations, with a remarkable evolution over 3Q18. 

In addition, cash generation, which totaled R $ 1.4 billion in 3Q19, a 16% reduction in net debt over 3Q18 and an increase in the average debt amortization period, from 3.2 years to 4, Four years show that the Company is meeting its financial recovery targets set for 2020 ahead of the initial forecast.

This performance allowed another review of BRF’s leverage indicator. Measured by the net debt / Adjusted EBITDA ratio, the ratio, which was 6.74 times in 3Q18, ended at 2.90 times in 3Q19. And with the results announced today, BRF should reach the end of 2019 with a leverage of about 2.75 times the EBTIDA, according to Material Fact released today by the Company.

In the domestic market, BRF maintained its leadership, with 43.6% market share, slightly below the annual comparison. Net revenues in the Brazil segment grew 6.3%, totaling R $ 4.3 billion in 3Q19. Focused on improving profitability and better commercial execution, sales progress was achieved through a better mix of channels and products, combined with operational efficiency, as well as the launch of new products.

 BRF’s international division advanced 10.6% compared to 3Q18, with net revenues of R $ 3.8 billion, benefiting from the favorable dynamics in Asia and good commercial execution in several locations, such as the Americas and the Middle East.

New qualifications for China were also featured in the period. In September, BRF received two new authorizations, one for chicken cuts and one for pork cuts, both located in Lucas do Rio Verde (MT). Already in November, a new product category, pork pigs, was enabled at the Campos Novos (SC) plant, which was already authorized to export pork cuts to China.

About BRF

With a broad portfolio of well-known products and brands such as Sadia, Perdigão and Qualy, BRF has over 90,000 employees committed to the management, quality and innovation of food production. With presence in more than 140 countries, the company is internationally recognized for its performance based on growth and sustainable development. With a history of over 80 years, it produces foods that are a source of strength to get life moving every day for the largest number of people in the world.

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