MBRF Global Foods Company (MBRF3) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 4.5% to R$136.485bn; adjusted EBITDA fell 27.1% to R$9.295bn, with a 6.8% margin.

• Q4 attributable net income was R$12m, versus a R$629m loss in Q4’22; South America and BRF results improved.

• 2023 strategy focused on optimizing South America’s portfolio toward higher-value products and gaining majority control of BRF; year-end stake reached 50.06%.

Financial highlights

• Q4 revenue declined 2.21% YoY to R$36.563bn; adjusted EBITDA rose 32.1% to R$2.938bn, and margin expanded 2.0pp to 8.0%.

• Q4 gross profit rose 15.6% to R$4.75bn, with gross margin up 210 bps to 13.0%.

• FY23 operating cash flow was R$11.144bn and free cash flow R$1.486bn.

• Q4 operating cash flow was R$2.822bn and free cash flow R$441m, after R$882m capex.

Outlook and guidance

• South America continued-operations slaughter capacity is planned to increase from 5,100 head/day in 2023 to 8,400 in 2025; deboning capacity from 6,000 to 11,900 head/day.

• South America plans to use feedlot integration and its own cattle to reach ~25% of supply; industrialized capacity is projected to rise from 20,100 to 20,300 tons/month by 2025.

• Traceability target advanced to end-2025: control 100% of direct and indirect beef cattle suppliers across Brazilian biomes, with R$100m planned for the program.

• North American investment priorities include modernized processing and high-value-added production; more than US$800m was reinvested over the prior five years.