BRF reports 7.1% growth in first quarter EBITDA
SAO PAULO, April 29, 2014 /PRNewswire/ -- BRF ended the first quarter of 2014 with a growth of 7.1% in EBITDA at R$ 861 million compared with the same period in 2013. Free cash flow generation for the period reached R$1.1 billion due both to an improvement in the share of certain categories as industrialized, frozen and pizza products, in which we saw an increase in the year to date market share for the Nielsen readings, as well as a greater balance between the level of investment and the reduction in working capital.
The result reflects the strategies and projects implemented during the quarter. The Company simplified its operations, introducing a greater responsiveness in decision making and taking steps to put into practice its go-to-market strategy in full, replicating the positive results of the pilot operations of Minas Gerais in the Sao Paulo and Mid-Western markets. In addition, BRF reorganized its international structure into four global regions of activity and continued to proceed with increasing its footprint in the overseas market.
BRF's net sales amounted to R$ 7.3 billion in the quarter, a year-on-year growth of 1.8%. Net income improved from R$ 208 million in 4Q13 to R$ 315 million in 1Q14, notwithstanding the seasonal effect, which always has a negative impact on business in the early months of the year. Year-on-year, net income was affected by non-recurring operating expenses arising from the Restructuring Plan, which, as already announced, should provide for an additional R$ 1.9 billion in operating results by 2016, as well as additional financial expenses.
BRF invested R$ 335.8 million during the period, largely dedicated to growth, efficiency and support projects, biological assets and further disbursements for construction work on the plant in the Middle East. In line with the strategy established this year for increasing returns, the Company prioritized Capex for certain projects in logistics, IT and automation, and is completing the Zero Based Budget, launched in January, the results of which will be captured throughout the year.
During this first quarter, the Marketing and Innovation area began its first wave of new product launches with the presentation of products in an organized manner and with greater integration of the market intelligence, brands, categories and research and development areas. In parallel, the Company continues its efforts to adjust its portfolio and focus on items with greater margins to improve overall returns.