Brasil Foods profits down 99%

Brasil Foods, the world’s largest poultry exporter, reported a 99% drop in quarterly profit, much of it due to rising feed costs and a weaker Brazilian real, Reuters reports.

Brasil Foods post a Q2 net income of 6 million reais (€2.4 million). Last year the company reported a net income of 498 million reais (€ 197.2 million).

The slide of Brazil’s currency, the real, boosted Brasil Foods exports. But the slide (10% against the US dollar) also drove up the cost of its foreign debts. Financial expenses grew more than 400% from a year ago to 288 million reais (€115.9 million).

Revenue rose 9%, driven by export growth, but profitability suffered as operating costs jumped 17% on surging grain prices.

EBITDA fell 28 %to 565 million reais (€227 million).

EBITDA as a share of revenue, a measure of profitability known as the EBITDA margin, slipped to 8.3% in the second quarter from 12.5% a year earlier.