BRF (BRFS3) Q2 2024 earnings summary

Executive summary

• Achieved record second quarter results with net revenue up 22.3% year-over-year, net income of R$1.1 billion, and free cash flow of R$1.7 billion, reversing prior year losses.

• Adjusted EBITDA reached R$2.6 billion (17.6% margin), marking the sixth consecutive quarter of margin improvement and the best first-half result.

• Net leverage dropped to 1.14x, the lowest in nine years, with strong operational efficiency gains and capital structure optimization.

• Operational advances, brand investments, and commercial execution drove strong volume growth in Brazil and international markets.

• ESG initiatives advanced, including 90% traceability of indirect grain suppliers, 35% clean energy usage, and top rankings in protein sector responsibility.

Financial highlights

• Net revenue was R$14,930 million, up 22.3% year-over-year and 11.6% sequentially.

• Adjusted EBITDA was R$2,621 million (17.6% margin), up 160.4% year-over-year.

• Gross profit reached R$3,930 million, with a gross margin of 26.4%.

• Free cash flow was R$1,728 million, up from negative R$694 million in 2Q23.

• Net debt reduced to R$8,932 million, with leverage at 1.14x LTM Adjusted EBITDA.

Outlook and guidance

• Focus remains on operational efficiency, innovation, and market expansion, with continued investment in ESG and new product launches.

• Ongoing expansion in international markets, with 32 new export authorizations in the quarter and 57 in the first half.

• ESG targets include achieving 50% clean electricity by 2030 and maintaining high supply chain traceability.

• Optimism for maintaining volume growth and evaluating capacity expansion from 2025 onward.

• Expectation of continued strong demand, new export permits, and favorable grain cost environment.