Minerva (BEEF3) Q4 2023 earnings summary

Executive summary

• FY23 net revenue was R$26.9bn; EBITDA was R$2,562.6m at a 9.5% margin, and net result was R$395.5m.

• Recurring free cash flow reached R$535.7m, adjusted for acquisitions; exports represented 65% of FY23 gross revenue.

• Q4 slaughter and sales volumes rose 26.1% and 16.8% YoY, respectively, while gross revenue declined 11.2%.

Financial highlights

• FY23 gross revenue fell 12.9% YoY to R$28.6bn; net revenue fell 13.2% to R$26.9bn.

• FY23 EBITDA declined 9.7% YoY to R$2,562.6m; margin increased 0.4 p.p. to 9.5%. Adjusted pro forma EBITDA was R$2,609.0m.

• FY23 net income fell 39.6% YoY to R$395.5m, with a 1.5% net margin; Q4 net result was R$19.8m.

• Q4 net revenue fell 9.8% YoY to R$6.17bn; EBITDA was R$605.9m, down 0.3%, with margin up 0.9 p.p. to 9.8%.

• FY23 gross margin was 20.5%, up 2.0 p.p. YoY; Q4 gross margin was 22.2%, up 2.7 p.p.

Outlook and guidance

• Management expected favorable global beef-market prospects in 2024, citing restricted US supply and strong South American animal availability.

• New China export approvals expanded access to 12 production units across Brazil, Uruguay, Argentina and Colombia, with capacity of ~14,700 head/day.

• Paraguay’s US market access, China’s opening to Colombian beef and additional Brazilian plant approvals were cited as export opportunities.