BRF, a prominent Brazilian meat company, has decided to cancel the sale of its pet-food division, a plan that was initially announced over eight months ago.
The publicly-listed BRF announced that its management has opted to retain the pet-food business. The “competitive sale process,” initiated in February, has been discontinued.
“As the third-ranked player in the pet-food market in Brazil and leader in super premium natural pet feed, the company will continue to drive growth in this segment by increasing distribution through specialised channels, strengthening [the] brand’s strategy by segment and channel, consolidating integration synergies, and advancing the export expansion strategy,” BRF said in a statement on 13 November.
BRF had enlisted Banco Santander as its financial advisor for the divestiture of the pet-food business. In February, the company had initiated preliminary discussions with potential buyers. Bloomberg sources had indicated that, at that time, a potential deal could secure 2 billion reais (equivalent to $405.5 million today).
During 2021, BRF completed the acquisition of two Brazilian pet-food manufacturers, Mogiana Alimentos and Hercosul.
According to BRF’s 2022 annual report, the company’s pet-food segment encompasses BRF Pet, Mogiana Alimentos, Hercosul Alimentos, Hercosul Soluções em Transportes, Hercosul Distribuição, and Hercosul International. However, the report did not offer a detailed breakdown of revenues for this category.
As a complete entity, BRF disclosed an 11.3% rise in revenue for the year, reaching 53.8 billion reais. The report highlighted the pet-food brands GranPlus and Biofresh. BRF also noted a 9.9% increase in pet-food sales volumes during the fourth quarter.
In the fiscal year 2022, the group’s adjusted EBITDA experienced a 50.4% decline, amounting to 2.86 billion reais. BRF’s net income from continuing operations reversed from a 517 million reais profit in the preceding 12 months to a loss of 3.09 billion reais. On a consolidated basis, the overall loss reached 3.10 billion reais, contrasting with a profit of 437 million reais.
In its second-quarter results issued in August, BRF said pet sales volumes rose 5.3%, which included the lines Super Premium Naturals, Biofresh and Guabi Natural.
Revenue for the quarter fell 5.7% to 12.2bn reais, with adjusted EBITDA down 32.7% at 10.01bn reais.
Net income from continuing operations was a 1.34bn reais loss, compared to a 451m reais loss a year earlier. Consolidated net income was a 1.34bn reais loss versus a 468m reais loss.
