Financial Data and Key Metrics Changes - The company reported a significant revenue growth of 22.3% compared to the same period in 2023, achieving an EBITDA of R15 billion, a 22% increase year-over-year, with free cash flow performance at R3.9 billion, with a profitability margin of 26.4% [5] Business Line Data and Key Metrics Changes - In Brazil, the EBITDA margin reached 15.7%, with significant growth in processed food categories, particularly in sales volumes [6][14] - The international market saw an improvement in EBITDA margin by 4 percentage points compared to the previous period, driven by recovery in export prices and market diversification [7][14] - The Ingredients and Pet segment reported an EBITDA margin of 11.9%, with a focus on expanding markets and increasing sales of value-added items [8] Market Data and Key Metrics Changes - The domestic market showed strong volume growth, particularly in processed products, despite a recovering consumption environment [6][14] - The international market demonstrated a strong performance, especially in Turkey and GCC, with gains in chicken and pork exports [7][14] - The halal market saw a market share gain of 1.2 percentage points compared to the previous quarter [7] Company Strategy and Development Direction - The company continues to focus on its efficiency journey guided by BRF+ 2.0, which has shown improvements in operating indicators and competitiveness [4][14] - The management model emphasizes capturing opportunities and maintaining a high-performance culture [4][15] - The company is expanding its presence in new markets, having won 57 new licenses in the first half of the year, including access to the UK and Southeast Asia [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the market, with balanced supply and demand across all locations, including Brazil [19][22] - The future perspectives are positive, with expectations of growth in soybean and corn production, which will support cost competitiveness [22] - The company is prepared to manage challenges, including the recent Newcastle disease, with a strong operational efficiency program in place [34][37] Other Important Information - The company achieved 90% traceability of indirect suppliers in critical biomes and aims for 50% of electricity from clean sources by 2030 [10] - The net debt was reported at R$8.9 billion, with the lowest leverage in nine years, contributing to reduced interest charges [12][11] Q&A Session All Questions and Answers Question: Insights on the international market and future expectations - Management highlighted a stable market with balanced supply and demand, and the importance of new permits in maintaining this balance [19][20] - The company is working on 40 new permits by the end of the year, adding to the 57 new destinations enabled for 2024 [26] Question: Factors affecting supply and market dynamics - Management noted that the current market conditions are stable, with no significant pressure on supply affecting prices [20][28] Question: Cost expectations and inventory levels - The company anticipates marginal room for a fall in feed prices, with ongoing efficiency programs supporting cost reductions [46][47] Question: Impact of Newcastle disease on operations - Management confirmed that markets have reopened, and the company has implemented plans to manage inventory and redirect products effectively [34][36] Question: Volume growth in Brazil and sustainability - The company attributed strong volume growth to improved commercial execution and market demand, with expectations for continued growth in the second half of the year [40][41] Question: Capital allocation and investment strategies - Management indicated a focus on organic growth and maintaining profitability, with potential for increased dividends and share repurchase programs [48][49] Question: Pricing dynamics in the international market - The company emphasized the importance of a robust pricing system and the ability to capitalize on market opportunities through strategic decision-making [50][51]
BRF(BRFS) - 2024 Q2 - Earnings Call Transcript