Marfrig Global Foods SA (MRRTY) Q2 2024 Earnings Call Highlights: Strong Revenue Growth and ...

GuruFocus News
4 min read

In This Article:

  • Consolidated Net Revenue: BRL34.8 billion, up 16.5% year-over-year.

  • North America Revenue: USD3.1 billion with an adjusted EBITDA margin of 2.9%.

  • South America Revenue: BRL3.7 billion with an adjusted EBITDA margin of 9.1%.

  • BRF Revenue: BRL14.9 billion with an adjusted EBITDA margin of 17.6%.

  • Consolidated Adjusted EBITDA: BRL3.4 billion, 64.8% higher than Q2 2023.

  • Free Cash Flow: Positive BRL419 million.

  • Net Income: BRL75 million, a turnaround from a loss of BRL784 million in Q2 2023.

  • Financial Leverage: Consolidated leverage of 3.38 times net debt to adjusted EBITDA.

  • Sales Volume (North America): Increased by 2.5% year-over-year.

  • Sales Volume (South America): 190,000 tonnes, up 31% year-over-year.

Release Date: August 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Marfrig Global Foods SA (MRRTY) reported a consolidated net revenue of BRL34.8 billion for Q2 2024, marking a 16.5% increase compared to the same period in 2023.

  • The company achieved a consolidated adjusted EBITDA of BRL3.4 billion, which is 64.8% higher than the previous year, with a margin increase of 285 basis points.

  • Free cash flow was positive at BRL419 million, and the company reported a net income of BRL75 million, a significant turnaround from a loss of BRL784 million in the same period last year.

  • Marfrig Global Foods SA (MRRTY) has been successful in its sustainability efforts, achieving 100% compliance in audits related to livestock in the Amazon for the 12th consecutive year.

  • The company has made strategic investments in BRF and a diversified business model, focusing on value-added products, which contributed to a strong EBITDA performance.

Negative Points

  • The North American operation experienced a 41.3% decline in EBITDA compared to the previous year, with margins impacted by higher cattle prices and lower drop values.

  • In South America, the adjusted EBITDA margin contracted by 1.4% due to economic challenges in Argentina, affecting the fresh meat operation.

  • The company faces challenges in the North American market with lower fed cattle supplies expected to reduce capacity utilization and margins in the second half of 2024.

  • Despite strong beef demand, the North American operation anticipates lower profitability in Q3, traditionally a weaker quarter after the barbecue season.

  • Argentina's economic situation, including high inflation and smaller cattle supply, continues to pose challenges for Marfrig Global Foods SA (MRRTY)'s operations in the region.

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