Marfrig’s profit more than doubled in the third quarter to R$1.67 billion with its North American operations.

a Marfrige International Foods (MRFG3) recorded a net profit of 1.67 billion riyals in the third quarter, a remarkable increase of 148.7% compared to the same period last year, amid strong results for the operation of the fund. a company in North America, according to the balance released Tuesday.

profit by ExpensesAnd taxesAdjusted depreciation and amortization (Ebitda) totaled SAR 4.73 billion in the period, an increase of 115.6% year-on-year, with 95% of the value due to the North American Ebitda unit, which offset adversity in Brazil.

The North American operation, led by the American National Beef, posted new record results, benefiting from replenishing stocks in the food service chain, and the economic scenario continues to be driven by fiscal stimulus from the federal government and period seasonality.

According to the CEO of the North America unit, Tim Klein, the third quarter is historically the strongest in the region.

However, in 2021, in addition to increasing sales in the period, the company also benefited from price increases in United State and in international markets.

“Industry fundamentals remain in our favour, we have ample stock of livestock… In the fourth quarter we will have a similar supply to the third. We will not have the same Ebitda margin as in the third quarter, but it will remain very strong,” he told reporters.

After hitting 26.8% in the third quarter, Klein expects the company’s Ebitda margin in North America to remain in the double digits at least in the last quarter of this year.

The importance of the unit is also shown in Marfrige’s net revenue, which amounted to 23.6 billion riyals in the quarter, with a growth of 40.4% in the annual comparison, and 71% coming from North America.

The US domestic market remains the largest consumer of products offered by the US unit, with a share of 88%.

Among international buyers, Japan NS South Korea It produced 62% of the national beef export earnings.

In this context, free cash flow generated by Marfrig was OMR 3.770 billion in the quarter.

In addition, 958.4 million riyals were paid in dividends to all Marfrig shareholders (equivalent to approximately 1.40 riyals/share), and 784 million riyals were paid to minority shareholders in National Beef.

The leverage ratio, measured for the ratio between net debt and adjusted Ebitda, was 1.10 times riyals or 0.35 times lower than the ratio measured in the previous quarter, the lowest in the company’s history.

South America

Marfrig’s South America Operation CEO Miguel Gularte said the company was able to honor export contracts signed between Brazil and China through shipments from units in Argentina and Uruguay, where the sale of Brazilian beef is still pending. by the Chinese due to two atypical cases of mad cow disease.

“We are waiting for the authorities’ response (on the ban) … in the South American operation, and even in the case of Asia, we have a situation that is still under control,” he said.

Meanwhile, he said, the company has also benefited from recent investments in the industrial products segment, whose internal consumption may rise through the fourth quarter.

Goulart also noted that Marfrig already has six Brazilian units authorized to export to the United States, and by the end of the year, two more units are expected to be approved to ship beef into the country.

In South America, Marfrig reported net revenue of OMR6.9 billion in the third quarter, an increase of 44.1% on a year over year basis. The adjusted Ebitda rate of the operation decreased by 40.5%, to 301 million riyals.

See the result below: