SAO PAULO, Oct 27 (Reuters) - BRF SA, the world’s largest poultry exporter, missed third-quarter profit estimates by a large margin after costs rose at a faster pace than revenue.
Net income at the São Paulo-based company tumbled 97 percent in the last quarter to 18 million reais ($5.7 million) from the same quarter a year ago, according to a securities filing on Thursday. The number missed the consensus profit estimate of 173.6 million reais compiled by Thomson Reuters.
BRF continued to struggle from soaring corn prices during the quarter, reflected by a 16 percent jump in the cost of goods sold that was slightly below analysts’ estimates. Net revenue rose 2.7 percent to 8.508 billion reais, below the consensus of 8.852 billion reais.
Management plans to discuss third-quarter results at a conference call early on Friday.
A drought affecting Brazil’s main winter corn crop earlier in 2016 slashed grain output. Record exports of the main animal feed ingredient over the past year and slack demand for meats in Brazil’s severe economic downturn have also complicated business for the sector.
Earnings before interest, taxes, depreciation and amortization slumped 32 percent to 886 million reais from the from the same quarter a year ago, the filing said. Analysts had forecast an average 1.063 billion reais for the third quarter.
Protein producers across Brazil trimmed 15 percent of their output capacity in recent months in response to the high feed costs that they have been unable to pass on to consumers, who are struggling with the country’s worst recession in eight decades.
$1 = 3.1658 reais Reporting by Reese Ewing; Writing by Guillermo Parra-Bernal; Editing by Ana Mano and Peter Cooney