São Paulo – An 11% Q1 export volume increase has failed to offset the exchange rate’s effect on finances for Brazil’s Minerva meat packing company, as it took a R$ 587.2 million (US$ 199 million) hit. Some of the corporation’s debt is dollar-denominated, hence the exchange’s financial impact.
Q1 statements released Thursday evening (30th) report R$ 2.3 billion (US$ 339.7 million) in revenues, up 55.8% from last year. Domestic sales grossed R$ 757.2 million (US$ 257.2 million) and foreign sales fetched R$ 1.552 billion (US$ 527.2 billion). Export volume was 55.1 tons in Q1 this year, and, 49.7 tons in Q1 2014.
“Q1 2015 performance solidifies our position as exporting company with a focus on emerging markets, an adequate commercial strategy, and efficient risk and channel management, to capitalize on the opportunities afforded to exporters by exchange rate volatility,” CEO Fernando Galletti de Queiroz is quoted as saying in the Q1 report.
The company remarked, though, that Middle East sales went down. They were 20% of total exports in Q1 2014, and 14% in Q1 this year. The reason was a slowdown in sales to Iran since late 2014, as the non-Arab country started buying more locally-sourced chicken. In response, Minerva says it redirected its sales towards Asia and North Africa, with high consumption and higher profitability.
Exports to African countries remained level, accounting for 17% of overall revenues, and volumes increased. Minerva said Egypt was its “highlight” buyer. It also reports that meat exports went down in Q1 but began to bounce back in March, and that countries like Morocco, Iraq, Cuba and South Africa have opened their markets to Brazilian beef.
*Translated by Gabriel Pomerancblum
