MINERVA: Larger Operation Causes R$ 313.5 Million Loss In The 4Q17

(RTTNews) - Brazilian meat producer Minerva posted a net loss of R$ 313.5 million (US$ 97.22 million) in the fourth quarter of 2017, compared to a R$ 12.3 million profit in the same period in 2016, despite a 55.1% increase in net revenue, to R$ 3.964 billion.

According to Minerva CEO Fernando Galletti de Queiroz, the losses were driven by the increase in the company's operation size, after the purchase of the JBS units in Mercosur in August last year. The acquisition affected Minerva's working capital and cash flow. Foreign exchange fluctuations also had a negative impact.

The company's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) totaled R$ 363.4 million in the fourth quarter, up 45.4% in the same comparison. The adjusted EBITDA margin for the period was 9.2%, lower than the 9.8% margin for the same quarter of 2016.

Minerva's gross revenue from the foreign market increased 55.3% in the fourth quarter, to R$ 2.402 billion, and accounted for 56.5% of the company's total gross revenue (R$ 4.251 billion). The meat division accounted for R$ 2.198 billion of gross external revenue, while other divisions accounted for R$ 204.7 million.

Minerva's gross revenue from the domestic market totaled R$ 1.848 billion in the fourth quarter of 2017, up 56.4% from the same period in 2016. The figure was 43.5% of the company's total gross revenue. In the domestic market, the meat division accounted for R$ 1.044 billion of gross revenue, while other divisions added R$ 804.5 million in the quarter.

In 2017 as a whole, the company recorded a loss of R$ 280.9 million, against a profit of R$ 195 million in 2016. Net revenue increased 45.4% to R$ 14.033 billion. Adjusted EBITDA amounted to R$ 1.265 billion, an increase of 28% over the previous year. Without adjustment, EBITDA was R$ 1.134 billion, up 14.7%. According to Minerva, the data for 2017 include proforma net revenue and EBITDA figures for the Mercosur assets plants acquired from JBS.