One of the largest beef companies in the world with operations in several continents presented its financial results for the first quarter of 2022. Brazil's Marfrig net revenue was 22.3 billion reais, up 29.6% year-on-year. Adjusted Ebitda reached 2.7 billion reais in 1Q22, up 60.9%, and the adjusted Ebitda margin was 12.3%.
Marfrig achieved a net income of 109 million reais, and operating cash flow was positive by 1.2 billion reais due to the better performance of operations in all regions in which the company operates.
Another highlight of the quarter was the leverage ratio, measured by the ratio between net debt and adjusted Ebitda in the last 12 months. This index reached 1.53x in dollars at the end of March and 1.36x in reais.
In the first quarter of 2022, the net revenue of Marfrig’s North America Operation, represented by the North American National Beef, reached a new historic mark: 15.8 billion reais (3 billion dollars), a growth of 30.6% compared to the same period last year. Performance results were born from the 26.9% increase in average price and the 2.9% growth in sales volume. In the quarter, the operation’s gross profit was 2.8 billion reais (538 million dollars), up 59.5% year-on-year.
The North America Operation represented 71% of Marfrig’s total net revenue in the first quarter of the year. Adjusted Ebitda was 2.3 billion reais (453 million dollars), up 63.4% year-on-year, representing 87% of the company’s total Ebitda in the quarter. The adjusted Ebitda margin was 15%.
The US domestic market continues to be the largest consumer of the products offered by Marfrig’s North America Operation (89%). As for other international markets, Japan and South Korea represented 60% of National Beef’s export earnings.
In the first quarter of this year, the sales volume of Marfrig’s South America Operation reached 345,000 tons, an 11% growth compared to the same period in 2021. Marfrig recorded net revenue of 6.5 billion reais in the region, an advance of 41.2% in the annual comparison. The performance results from the higher average total sales price of 27.2%. The average increase in export price (+37.1%) was the main highlight of the period.
Exports accounted for 65% of the operation’s revenue, a record percentage with a growth of 473 bps compared to the same period in 2021 and 1,341 bps compared to the fourth quarter of 2021. In the first three months of 2022, approximately 68% of the total export earnings were correlated to sales to the Chinese and Hong Kong markets.
In addition to investments in the construction of the hamburger factory in Bataguassu, Mato Grosso, which should add 24,000 tons to the company’s current capacity, there are expansion projects underway at the plant in Tacuarembó, Uruguay, and San Jorge, in Argentina.
The adjusted Ebitda of the South America Operation was 411 million reais in the first quarter of 2022, 94.9% higher than last year’s. The Ebitda margin reached 6.4%, 175 bps above 1Q21. Gross profit was 654 million reais, 63.7% higher on the same basis of comparison.