BRF (BRFS) closed at $3.56 in the latest trading session, marking a +2.89% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.73%. Meanwhile, the Dow experienced a rise of 0.18%, and the technology-dominated Nasdaq saw an increase of 1.21%. Shares of the chicken, beef and pork producer have depreciated by 12.85% over the course of the past month, underperforming the Consumer Staples sector's loss of 4.07%, and the S&P 500's gain of 0.47%.The upcoming earnings rel ...

Company Performance - BRF's stock price decreased by 3.23% to $3.90, underperforming the S&P 500's daily loss of 0.33% [1] - Over the past month, BRF shares increased by 9.81%, outperforming the Consumer Staples sector's decline of 0.8% and the S&P 500's gain of 4.07% [1] Financial Projections - BRF is expected to report earnings of $0.11 per share, indicating no growth compared to the same quarter last year [2] - For the entire fiscal year, earnings are projected at $0.39 per share and revenue at $12.15 billion, reflecting increases of +8.33% and +11.05% respectively from the previous year [2] Analyst Sentiment - Recent revisions to analyst forecasts for BRF are important as they indicate changing near-term business trends and analysts' confidence in performance [3] Valuation Metrics - BRF has a Forward P/E ratio of 10.33, which is lower than the industry average of 16.17, suggesting it is trading at a discount [6] - The company has a PEG ratio of 0.25, significantly below the industry average PEG ratio of 1.63 [6] Industry Context - The Food - Miscellaneous industry, which includes BRF, has a Zacks Industry Rank of 185, placing it in the bottom 26% of over 250 industries [7] - Stronger industry groups, as indicated by the Zacks Industry Rank, tend to outperform weaker groups by a factor of 2 to 1 [7]

Group 1 - BRF's stock closed at $4.03, reflecting a +2.03% increase, outperforming the S&P 500's gain of 0.28% [1] - Over the past month, BRF shares have increased by 3.67%, while the Consumer Staples sector has decreased by 1.44% [1] - The upcoming financial results are expected to show an EPS of $0.11, unchanged from the same quarter last year, with projected annual earnings of $0.39 per share and revenue of $12.15 billion, representing increases of +8.33% and +11.05% respectively [2] Group 2 - Recent analyst estimate revisions for BRF indicate a positive outlook for the business [3] - The Zacks Rank system, which incorporates estimate changes, currently ranks BRF as 2 (Buy) [5] - The Forward P/E ratio for BRF is 10.13, which is lower than the industry average of 15.4, and the PEG ratio is 0.25 compared to the industry average of 1.61 [6] Group 3 - The Food - Miscellaneous industry, which includes BRF, has a Zacks Industry Rank of 182, placing it in the bottom 27% of over 250 industries [7] - The performance of individual industry groups is measured by the Zacks Industry Rank, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - Marfrig has achieved over 110% returns since the last analysis, indicating the accuracy of the bullish call made previously [1] Company Overview - Marfrig is highlighted as a significant player in the global equities market, particularly focusing on emerging markets and under-the-radar investment opportunities [1] Analyst Background - The analysis is conducted by a seasoned research analyst with 10 years of experience in investment banking, specializing in industry and company research [1]

Group 1: Company Performance - BRF closed at $3.60, down 1.37% from the previous session, underperforming the S&P 500 which lost 0.11% [1] - Over the past month, BRF shares gained 2.53%, while the Consumer Staples sector declined by 1.94% and the S&P 500 increased by 5.17% [1] Group 2: Earnings Forecast - Analysts forecast BRF to report an EPS of $0.11, unchanged from the same quarter last year [2] - For the full year, earnings are projected at $0.39 per share and revenue at $12.15 billion, reflecting increases of +8.33% and +11.05% respectively from the prior year [2] Group 3: Analyst Estimates and Rankings - Recent adjustments to analyst estimates for BRF are important as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] - BRF currently holds a Zacks Rank of 2 (Buy), with the Zacks Rank system showing a strong track record of exceeding expectations [5] Group 4: Valuation Metrics - BRF has a Forward P/E ratio of 9.36, which is a discount compared to the industry average of 15.08 [6] - The company has a PEG ratio of 0.23, significantly lower than the industry average PEG ratio of 1.6 [6] Group 5: Industry Context - The Food - Miscellaneous industry, which includes BRF, is ranked 187 in the Zacks Industry Rank, placing it in the bottom 25% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - BRF (BRFS) is currently rated as a 2 (Buy) by Zacks Rank, indicating a positive earnings outlook, while Sysco (SYY) is rated 5 (Strong Sell), suggesting a negative earnings outlook [3] - Value investors are interested in various valuation metrics to determine if a company is undervalued, beyond just earnings estimates [3][4] Valuation Metrics - BRFS has a forward P/E ratio of 8.13, significantly lower than SYY's forward P/E of 17.33, indicating that BRFS may be undervalued [5] - The PEG ratio for BRFS is 0.20, while SYY has a PEG ratio of 2.46, further suggesting that BRFS has a more favorable valuation in terms of expected earnings growth [5] - BRFS has a P/B ratio of 1.36 compared to SYY's P/B of 19.14, reinforcing the notion that BRFS is undervalued relative to its book value [6] - Overall, BRFS has a Value grade of B, while SYY has a Value grade of C, indicating that BRFS is the better option for value investors at this time [6]

Company Performance - BRF closed at $3.60, reflecting a -3.74% change from the previous day, underperforming the S&P 500's 0.22% loss [1] - Over the past month, BRF shares gained 0.54%, while the Consumer Staples sector lost 1.34% and the S&P 500 gained 0.45% [1] Earnings Expectations - Analysts expect BRF to report EPS of $0.11, unchanged from the prior-year quarter [2] - For the fiscal year, Zacks Consensus Estimates predict earnings of $0.4 per share and revenue of $0 million, indicating changes of +11.11% and 0% respectively from the previous year [2] Analyst Estimates - Changes in analyst estimates for BRF are crucial as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] Zacks Rank and Valuation - BRF currently holds a Zacks Rank of 2 (Buy), with the Zacks Rank system showing a strong track record of exceeding expectations [5] - The Forward P/E ratio for BRF is 9.35, indicating a discount compared to the industry average Forward P/E of 15.6 [6] - BRF has a PEG ratio of 0.23, significantly lower than the industry average PEG ratio of 1.59 [6] Industry Context - The Food - Miscellaneous industry, part of the Consumer Staples sector, holds a Zacks Industry Rank of 171, placing it in the bottom 31% of over 250 industries [7]

Core Viewpoint - Investors in the Food - Miscellaneous sector should consider BRF (BRFS) and Celsius Holdings Inc. (CELH) for potential value opportunities, with BRFS currently appearing to offer better value based on various financial metrics [1]. Group 1: Zacks Rank and Earnings Outlook - BRF has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while Celsius Holdings has a Zacks Rank of 3 (Hold) [3]. - The improving earnings outlook for BRF makes it a more attractive option in the Zacks Rank model [7]. Group 2: Valuation Metrics - BRF has a forward P/E ratio of 9.05, significantly lower than CELH's forward P/E of 49.58, suggesting BRF is undervalued [5]. - The PEG ratio for BRF is 0.22, indicating strong expected EPS growth relative to its valuation, while CELH has a PEG ratio of 1.45 [5]. - BRF's P/B ratio is 1.32, compared to CELH's P/B of 23.61, further highlighting BRF's relative undervaluation [6]. - Based on these valuation metrics, BRF holds a Value grade of B, while CELH has a Value grade of D [6].

[Management Report](index=12&type=section&id=Management%20Report) [Message from the Chairman](index=22&type=section&id=Message%20from%20the%20Chairman) The Chairman highlights consistent growth and record Q1 2025 results, attributing success to financial discipline, efficient capital allocation, and strategic market diversification. - BRF started 2025 with consistent growth and record figures, demonstrating a commitment to efficient capital allocation and financial discipline[22](index=22&type=chunk) - The company's market diversification strategy and focus on value-added products in strategic markets like Saudi Arabia and China have been crucial for its growth[23](index=23&type=chunk) [Message from Management](index=25&type=section&id=Message%20from%20Management) Management reports a strong Q1 2025 with doubled net income, 16% revenue growth, record adjusted EBITDA, and historic low leverage, driven by efficiency programs and strategic acquisitions. Q1 2025 Key Financial Highlights | Metric | Value | Change vs. Q1 2024 | | :--- | :--- | :--- | | Net Income | R$1.2 billion | +100% | | Net Revenue | R$15.5 billion | +16% | | Adjusted EBITDA | R$2.8 billion | +30% | | Free Cash Flow | R$1.3 billion | - | | Net Leverage | 0.54x | - | - The BRF+ efficiency program generated **R$305 million in savings**, contributing to increased factory occupancy and sales volume growth[26](index=26&type=chunk) - Strategic growth was advanced through the completion of an acquisition of a processed foods plant in China and a **26% stake in Addoha Poultry Company** in Saudi Arabia[29](index=29&type=chunk) - Employee engagement reached **89%**, an increase of **4 percentage points** from 2024, placing the company above the average for high-performance companies[30](index=30&type=chunk) [Operational and Financial Performance](index=28&type=section&id=Operational%20and%20Financial%20Performance) BRF's Q1 2025 consolidated net revenue grew 16.0% to R$15.5 billion, with adjusted EBITDA up 30.0% to R$2.75 billion, and net leverage significantly reduced to 0.54x. Consolidated Highlights Q1 2025 vs. Q1 2024 | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Volume (Thousand Tons) | 1,243 | 1,153 | 7.7% | | Net Revenues (R$ Million) | 15,512 | 13,378 | 16.0% | | Gross Profit (R$ Million) | 4,053 | 3,224 | 25.7% | | Net Income (R$ Million) | 1,185 | 594 | 99.6% | | Adjusted EBITDA (R$ Million) | 2,753 | 2,117 | 30.0% | | Adjusted EBITDA Margin (%) | 17.7% | 15.8% | 1.9 p.p. | | Leverage (Net Debt/Adj.EBITDA LTM) | 0.54x | 1.45x | (62.9%) | - The consolidated results for Q1 2025 were impacted by hyperinflation in Türkiye; managerial results, excluding these effects, are presented for business segment analysis[32](index=32&type=chunk) [Brazil Segment](index=31&type=section&id=Brazil%20Segment) The Brazil segment achieved strong Q1 2025 performance with 20.6% revenue growth to R$7.4 billion and 36.8% adjusted EBITDA growth to R$1.27 billion, driven by improved execution and processed product sales. Brazil Segment Financials (R$ Million) | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Net Operating Revenues | 7,435 | 6,162 | 20.6% | | Gross Profit | 2,060 | 1,587 | 29.8% | | Adjusted EBITDA | 1,274 | 931 | 36.8% | | Adjusted EBITDA Margin (%) | 17.1% | 15.1% | 2.0 p.p. | - Sales volume of processed products grew by **16% year-over-year**, highlighting strong performance in this category[35](index=35&type=chunk) - The company achieved a new record low for FIFO (First-In, First-Out) discounts, demonstrating assertiveness in demand planning and production[37](index=37&type=chunk) - Brand campaigns were prominent, with Sadia focusing on cold cuts and its presence at Lollapalooza, Perdigão sponsoring sports events like Copa do Nordeste and NFL in Brazil, and Qualy achieving record volumes and market share in margarine[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[46](index=46&type=chunk) [International Segment](index=40&type=section&id=International%20Segment) The International segment maintained healthy profitability in Q1 2025 with R$1.43 billion adjusted EBITDA and 19.1% margin, driven by export volume growth, favorable pricing, and strategic investments in the GCC. International Segment Financials (R$ Million) | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Net Operating Revenues | 7,483 | 6,484 | 15.4% | | Gross Profit | 1,903 | 1,497 | 27.1% | | Adjusted EBITDA | 1,426 | 1,096 | 30.1% | | Adjusted EBITDA Margin (%) | 19.1% | 16.9% | 2.2 p.p. | - The company obtained **12 new export authorizations** in the quarter, including the key resumption of poultry exports to China from the Rio Verde (GO) unit[49](index=49&type=chunk) - In the GCC, sales volumes increased driven by Ramadan seasonality; the company announced a **US$160 million investment** to build a new processed products factory in Jeddah, Saudi Arabia, which will increase local production capacity from **17,000 to 57,000 tons per year**[52](index=52&type=chunk) - In Türkiye, despite price pressure on in-natura products, the company maintained market leadership with a **25.3% total market share** and **29.8% in processed products**[53](index=53&type=chunk) [Other Segments](index=49&type=section&id=Other%20Segments) The 'Other Segments' (Ingredients and Pet Food) reported R$76 million adjusted EBITDA in Q1 2025, with reduced revenue but positive impacts from efficiency programs, an international award, and grain arbitrage. Other Segments Financials (R$ Million) | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Net Operating Revenues | 659 | 730 | (10.2%) | | Gross Profit | 133 | 174 | (23.6%) | | Adjusted EBITDA | 76 | 78 | (2.8%) | | Adjusted EBITDA Margin (%) | 11.5% | 10.7% | 0.8 p.p. | - In Ingredients, supply was reduced due to the BRF+ efficiency program; BRF Ingredients won first place in the F3 Krill Replacement Challenge 2025 with its chicken hydrolysate[67](index=67&type=chunk) - In Pet Food, the company strengthened its commercial team and unified its ERP (SAP) system across all Brazilian units to enhance synergies and savings[68](index=68&type=chunk) - One-off grain arbitrage operations contributed to the improvement in the absolute result of the Other Segments business[69](index=69&type=chunk) [Consolidated Performance](index=55&type=section&id=Consolidated%20Performance) This section details BRF's Q1 2025 consolidated financial results, covering revenue, costs, expenses, financial results, net income, EBITDA, cash flow, and indebtedness, highlighting growth, cost management, and debt reduction. [Net Operating Revenue](index=58&type=section&id=Net%20Operating%20Revenue) Consolidated net operating revenue increased by 16.0% year-over-year to R$15.5 billion in Q1 2025, driven by higher sales volume and average prices, with hedge accounting protecting against exchange rate volatility. Net Operating Revenue (NOR) - Consolidated | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Volume (Thousand Tons) | 1,243 | 1,153 | 7.7% | | Net Operational Revenues (R$ Million) | 15,512 | 13,378 | 16.0% | | Average Price (R$/kg) | 12.48 | 11.60 | 7.6% | - The company uses derivative financial instruments for cash flow hedging to protect operating results from exchange rate volatility; the net effect of settled instruments in Q1 2025 was a reduction of **R$36.771 million** in the result[78](index=78&type=chunk)[80](index=80&type=chunk) [Costs, Expenses & Other Operating Results](index=61&type=section&id=Costs%2C%20Expenses%20%26%20Other%20Operating%20Results) Consolidated cost of goods sold per kg rose 4.8% year-over-year due to higher production costs and raw material purchases, partially offset by BRF+ savings, while operating expenses as a percentage of net revenue decreased by 1.0 percentage point. Cost of Goods Sold (COGS) - Consolidated | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Cost of Goods Sold (R$ Million) | (11,459) | (10,153) | 12.9% | | COGS/kg (R$) | (9.22) | (8.80) | 4.8% | - The BRF+ efficiency program generated **R$305 million in savings** during the quarter, partially mitigating cost increases[85](index=85&type=chunk) Operating Expenses - Consolidated | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Selling Expenses (R$ Million) | (1,949) | (1,799) | 8.3% | | General & Admin Expenses (R$ Million) | (217) | (201) | 7.8% | | Operating Expenses as % of NOR | 14.0% | 15.0% | -1.0 p.p. | [Net Financial Result](index=64&type=section&id=Net%20Financial%20Result) The net financial result improved by 15.1% to an expense of R$457 million in Q1 2025, driven by increased financial revenues from a higher cash position and a positive net effect from exchange rate variations and derivatives. Net Financial Result (R$ Million) | Component | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Financial Income | 366 | 274 | | Financial Expenses | (921) | (907) | | Exchange variation and derivative results, net | 98 | 95 | | **Net Financial Results** | **(457)** | **(538)** | - Financial revenues grew by **R$92 million** year-over-year, primarily due to higher interest income on a larger cash position[96](index=96&type=chunk) - The net effect of exchange rate variations on monetary assets/liabilities and their hedges was a gain of **R$39 million**, an improvement of **R$45 million** compared to Q1 2024[102](index=102&type=chunk) [Net Income (Loss)](index=70&type=section&id=Net%20Income%20%28Loss%29) The company reported a consolidated net income of R$1.185 billion in Q1 2025, a significant 99.6% increase from the prior year, driven by robust operating performance and reduced net financial expenses. Net Income (R$ Million) | Metric | 1Q25 | 1Q24 | Change % YoY | | :--- | :--- | :--- | :--- | | Net Income | 1,185 | 594 | 99.6% | | Net Margin (%) | 7.6% | 4.4% | 3.2 p.p. | [Adjusted EBITDA](index=70&type=section&id=Adjusted%20EBITDA) Consolidated adjusted EBITDA for Q1 2025 increased 30.0% to R$2.753 billion, with the margin expanding by 1.9 percentage points to 17.7%, primarily due to strong operating performance and adjustments for hyperinflation in Turkey. Adjusted EBITDA Reconciliation (R$ Million) | Description | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Net Income | 1,185 | 594 | | (+) Income Tax & Social Contribution | 242 | 121 | | (+) Net Financial | 457 | 538 | | (+) Depreciation & Amortization | 838 | 848 | | **EBITDA** | **2,723** | **2,100** | | (+) Adjustments (Hyperinflation, etc.) | 30 | 17 | | **Adjusted EBITDA** | **2,753** | **2,117** | [Cash Flow](index=70&type=section&id=Cash%20Flow) BRF generated R$1.3 billion in free cash flow in Q1 2025, driven by strong operating profit and an improved cash conversion cycle, despite significant investment outflows for CAPEX and acquisitions. Managerial Free Cash Flow (R$ Million) | Component | 1Q25 | 1Q24 | | :--- | :--- | :--- | | Adjusted EBITDA | 2,753 | 2,117 | | Cash Flow from Operating Activities | 3,617 | 2,048 | | Cash Flow from Investments | (1,484) | (696) | | **Free Cash Flow** | **1,282** | **844** | - The cash conversion cycle ended Q1 2025 at **-6.6 days**, an improvement of **11.4 days** compared to Q1 2024[109](index=109&type=chunk) - Total CAPEX in Q1 2025 was **R$975 million**, with **R$383 million** allocated to growth, efficiency, and support projects[111](index=111&type=chunk) - Investment cash flow included **R$511 million** for the acquisition of **26% of Addoha Poultry Company**[110](index=110&type=chunk) [Indebtedness](index=76&type=section&id=Indebtedness) The company significantly reduced its net debt to R$5.98 billion in Q1 2025, achieving a historic low net leverage of 0.54x, and received a 'Positive' outlook upgrade from Fitch Ratings. Debt Profile (R$ Million) | Metric | 03.31.2025 | 12.31.2024 | 03.31.2024 | | :--- | :--- | :--- | :--- | | Gross Debt | 19,582 | 21,045 | 19,414 | | Total Cash Investments | 13,600 | 12,720 | 10,397 | | **Net Debt** | **5,982** | **8,325** | **9,016** | - Net leverage (Net Debt / LTM Adj. EBITDA) reached a historic low of **0.54x** in Q1 2025, compared to **0.79x** in Q4 2024[121](index=121&type=chunk) - Fitch Ratings raised the outlook for BRF's credit ratings on a global corporate scale from 'stable' to 'positive'[121](index=121&type=chunk) - Post-quarter, the company issued **R$1.25 billion in debentures**, including its first-ever 15 and 20-year series, extending the proforma average debt maturity to **8.5 years**[120](index=120&type=chunk) [ESG Highlights](index=82&type=section&id=ESG%20Highlights) BRF achieved significant ESG milestones in Q1 2025, including inclusion in B3's sustainability indices, top rankings in animal welfare benchmarks, and the publication of its 2024 Integrated Report. - The company was included in the ISE (Corporate Sustainability Index) and Carbon Efficient Index portfolios on the B3 stock exchange[125](index=125&type=chunk) - BRF was ranked as the top poultry and pork protein company in the Benchmark on Farm Animal Welfare (BBFAW), a key global ranking for farm animal welfare[127](index=127&type=chunk) - The company published its Integrated Report for 2024, reaffirming its commitment to transparency and governance[128](index=128&type=chunk) [About Us](index=97&type=section&id=About%20Us) This section provides an overview of BRF's corporate profile, detailing its integrated 'farm to table' model, extensive global operations, diverse product portfolio, and leading brands in key markets. - BRF operates a fully integrated business model, controlling the entire production chain from grain consumption and animal farming to processing, distribution, and point of sale[137](index=137&type=chunk)[138](index=138&type=chunk) - The company has a significant global footprint, with **45 industrial facilities**, a presence in approximately **120 countries**, and over **100,000 employees worldwide**[138](index=138&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - BRF holds leading market share in key categories, including **40.5% in processed products in Brazil**, **36.6% in the Gulf countries**, and **25.3% in Türkiye**[138](index=138&type=chunk)[140](index=140&type=chunk)[150](index=150&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the primary consolidated and parent company financial statements for Q1 2025, including the Statements of Financial Position, Income, Comprehensive Income, Changes in Equity, Cash Flows, and Value Added. [Statements of Financial Position](index=5&type=section&id=Statements%20of%20Financial%20Position) The consolidated statement of financial position as of March 31, 2025, shows total assets of R$62.89 billion, total liabilities of R$45.51 billion, and total equity of R$17.38 billion. Consolidated Balance Sheet Summary (in thousands of BRL) | Account | 03.31.2025 | 12.31.2024 | | :--- | :--- | :--- | | **Total Current Assets** | 31,458,506 | 30,830,485 | | **Total Non-Current Assets** | 31,431,162 | 31,844,576 | | **Total Assets** | **62,889,668** | **62,675,061** | | **Total Current Liabilities** | 21,571,191 | 20,820,577 | | **Total Non-Current Liabilities** | 23,942,198 | 25,355,295 | | **Total Liabilities** | **45,513,389** | **46,175,872** | | **Total Equity** | **17,376,279** | **16,499,189** | [Statements of Income (Loss)](index=7&type=section&id=Statements%20of%20Income%20%28Loss%29) For Q1 2025, consolidated net sales reached R$15.51 billion, gross profit was R$4.05 billion, and net income attributable to controlling shareholders significantly improved to R$1.12 billion. Consolidated Income Statement Summary (in thousands of BRL) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | 15,512,021 | 13,377,509 | | Gross Profit | 4,052,605 | 3,224,287 | | Income Before Financial Results and Taxes | 1,884,532 | 1,252,295 | | Income (Loss) for the Year | 1,185,070 | 593,744 | | Attributable to Controlling Shareholders | 1,124,435 | 504,993 | [Statements of Comprehensive Income (Loss)](index=8&type=section&id=Statements%20of%20Comprehensive%20Income%20%28Loss%29) The consolidated statement of comprehensive income for Q1 2025 shows a total comprehensive income of R$1.29 billion, including net income and other comprehensive income items like foreign currency translation and cash flow hedges. Consolidated Comprehensive Income Summary (in thousands of BRL) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income for the period | 1,185,070 | 593,744 | | Other comprehensive income (loss), net | 108,342 | (61,328) | | **Comprehensive income for the period** | **1,293,412** | **532,416** | [Statements of Changes in Equity](index=9&type=section&id=Statements%20of%20Changes%20in%20Equity) Consolidated equity increased from R$16.50 billion to R$17.38 billion in Q1 2025, primarily driven by net income and positive other comprehensive income, partially offset by treasury share acquisitions. - Total consolidated equity increased from **R$16.50 billion to R$17.38 billion** during Q1 2025[9](index=9&type=chunk) - Key changes included income for the year (**R$1.185 billion**), positive other comprehensive income (**R$108 million**), and acquisition of treasury shares (**R$417 million**)[9](index=9&type=chunk) [Statements of Cash Flows](index=10&type=section&id=Statements%20of%20Cash%20Flows) For Q1 2025, the company generated R$3.61 billion in net cash from operating activities, with net cash used in investing activities of R$1.30 billion and financing activities of R$1.15 billion, resulting in an R$887 million net increase in cash. Consolidated Cash Flow Summary (in thousands of BRL) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | 3,613,133 | 1,921,659 | | Net cash used in investing activities | (1,302,122) | (448,324) | | Net cash used in financing activities | (1,149,066) | (1,373,301) | | **Net increase in cash and cash equivalents** | **886,603** | **302,544** | [Statements of Value Added](index=11&type=section&id=Statements%20of%20Value%20Added) The company generated R$5.84 billion in total value added in Q1 2025, primarily distributed to employees, government, and shareholders. Distribution of Added Value - Q1 2025 (in thousands of BRL) | Distribution | Amount | | :--- | :--- | | Payroll | 2,034,325 | | Taxes, Fees and Contributions | 1,722,584 | | Capital Remuneration from Third Parties | 893,403 | | Interest on Own-Capital (Shareholders) | 1,185,070 | | **Total Value Added Distributed** | **5,835,382** | [Notes to the Financial Statements](index=117&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed disclosures supporting the primary financial statements, covering operations, accounting policies, risk management, segment information, related party transactions, and post-period events. [Note 1. Company's Operations](index=117&type=section&id=Note%201.%20Company%27s%20Operations) This note describes BRF's global food business, recent climate event impacts, a plant fire, and strategic acquisitions including stakes in Addoha Poultry and Gelprime, and a processed foods factory in China. - BRF is a Brazilian multinational food company focused on raising, producing, and selling poultry and pork products, with a portfolio of well-known brands[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - The company was affected by climate events in Rio Grande do Sul in May 2024, resulting in shutdowns and additional expenses of **R$1.184 million** recognized in COGS[163](index=163&type=chunk)[164](index=164&type=chunk) - Key strategic moves include the acquisition of **26% of Addoha Poultry Company** in Saudi Arabia for **R$511 million**, the acquisition of a processed foods factory in Henan, China, and an agreement to acquire **50% of gelatin producer Gelprime**[168](index=168&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk)[173](index=173&type=chunk) [Note 23. Financial instruments and risk management](index=149&type=section&id=Note%2023.%20Financial%20instruments%20and%20risk%20management) This note details the company's management of credit, liquidity, and market risks, outlining its capital structure, debt profile (R$19.6 billion gross, R$6.0 billion net), and derivative instruments used for hedging. Consolidated Net Debt as of March 31, 2025 (in thousands of BRL) | Component | Amount | | :--- | :--- | | Gross debt | (19,581,762) | | Cash and cash equivalents | 12,051,967 | | Marketable securities | 1,220,922 | | Restricted cash | 326,973 | | **Net debt** | **(5,981,900)** | - The company actively manages market risks using derivative financial instruments, including foreign exchange, commodity price, and interest rate hedges, with detailed positions provided for each risk category[283](index=283&type=chunk)[285](index=285&type=chunk)[296](index=296&type=chunk)[302](index=302&type=chunk) - A sensitivity analysis shows the potential impact of fluctuations in exchange rates and commodity prices on the company's results; for example, a **15% appreciation of the USD against the BRL** would have a net positive effect of **R$223.8 million** on operating results from hedged USD revenues[310](index=310&type=chunk)[314](index=314&type=chunk) [Note 24. Segment Information](index=163&type=section&id=Note%2024.%20Segment%20Information) The company reports operations across Brazil, International, and Other segments, with Brazil and International segments showing nearly equal net sales of R$7.4 billion each in Q1 2025. Consolidated Net Sales by Segment (Q1 2025, in thousands of BRL) | Segment | Net Sales | | :--- | :--- | | Brazil | 7,434,554 | | International | 7,422,052 | | Other segments | 655,415 | | **Total** | **15,512,021** | Consolidated Gross Profit by Segment (Q1 2025, in thousands of BRL) | Segment | Gross Profit | Margin (%) | | :--- | :--- | :--- | | Brazil | 2,060,004 | 27.7% | | International | 1,860,495 | 25.1% | | Other segments | 133,290 | 20.3% | [Note 28. Related parties](index=168&type=section&id=Note%2028.%20Related%20parties) This note discloses transactions with related parties, including significant intercompany balances and total remuneration for key management personnel, which amounted to R$24.4 million in Q1 2025. - The company has significant intercompany transactions, including export pre-payments from its trading subsidiaries to the parent company[336](index=336&type=chunk) Management Remuneration (Q1, in thousands of BRL) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Salary and profit sharing | 21,362 | 15,404 | | Share-based payment | 1,975 | 4,515 | | **Total** | **24,364** | **21,172** | [Note 31. Events after the reporting period](index=171&type=section&id=Note%2031.%20Events%20after%20the%20reporting%20period) This note details significant post-reporting period events, including Board approval for a US$160 million factory in Saudi Arabia, a R$1.25 billion debenture issuance, and a proposed share merger with Marfrig Global Foods S.A. - On April 21, 2025, the Board approved a **~US$160 million investment** to build a new processed products factory in Jeddah, Saudi Arabia, increasing local production capacity to **57,000 tons/year**[343](index=343&type=chunk)[344](index=344&type=chunk) - On April 23, 2025, the company settled its sixth issuance of debentures, totaling **R$1.25 billion**[345](index=345&type=chunk) - On May 15, 2025, the boards of BRF and Marfrig approved a plan for a merger of shares, where BRF would become a wholly-owned subsidiary of Marfrig; BRF shareholders would receive **0.8521 Marfrig shares** for each BRF share[349](index=349&type=chunk)[350](index=350&type=chunk) [Declarations and Opinions](index=173&type=section&id=Declarations%20and%20Opinions) This section contains formal reports and opinions from independent auditors, the Audit and Integrity Committee, and the Executive Board, all supporting the approval of the Q1 2025 financial statements. [Independent Auditors' Report](index=173&type=section&id=Independent%20Auditors%27%20Report) The independent auditors, Grant Thornton Auditores Independentes Ltda., concluded that the interim financial information for Q1 2025 was prepared, in all material respects, in accordance with relevant accounting standards. - The auditors issued an unmodified conclusion on the interim financial statements, stating they are not aware of any material misstatements[360](index=360&type=chunk) [Opinion of the Audit and Integrity Committee](index=175&type=section&id=Opinion%20of%20the%20Audit%20and%20Integrity%20Committee) The Audit and Integrity Committee examined the Q1 2025 interim financial information and related reports, finding no significant divergences and recommending approval of the financial information. - The Audit and Integrity Committee found no significant disagreements and recommended the approval of the interim financial statements[364](index=364&type=chunk) [Opinion of Executive Board](index=176&type=section&id=Opinion%20of%20Executive%20Board) The Executive Board of BRF S.A. formally reviewed, discussed, and agreed with the company's Q1 2025 interim financial information and the independent auditor's report. - The Executive Board declared its agreement with the Q1 2025 financial statements and the independent auditor's report[366](index=366&type=chunk)

Core Viewpoint - Brokerage recommendations, particularly for BRF (BRFS), are often relied upon by investors, but their effectiveness in guiding investment decisions is questionable [1][5][10]. Brokerage Recommendations - BRF has an average brokerage recommendation (ABR) of 1.80, indicating a consensus between Strong Buy and Buy, with 60% of the five recommendations being Strong Buy [2][5]. - Despite the positive ABR, studies suggest that brokerage recommendations do not reliably indicate stocks with high potential for price appreciation [5][10]. Analyst Bias - Analysts from brokerage firms tend to exhibit a positive bias in their ratings due to vested interests, often issuing five Strong Buy recommendations for every Strong Sell [6][10]. - This misalignment of interests can mislead investors regarding the actual price direction of stocks [7][10]. Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which correlate strongly with near-term stock price movements [8][11]. - The Zacks Rank is distinct from ABR, as it is a quantitative model reflecting timely earnings estimates, while ABR may not be up-to-date [9][12]. Current Earnings Estimates for BRF - The Zacks Consensus Estimate for BRF's current year earnings remains unchanged at $0.35, suggesting stable analyst views on the company's earnings prospects [13]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for BRF, indicating a cautious approach despite the Buy-equivalent ABR [14].