The company increased production and diversified export destinations in the period, making its first shipment to Canada and obtaining license for the Philippines exports

August 7, 2024 – FriGol, one of Brazil’s largest and most traditional beef processors, ended the second quarter with net revenue of BRL 786.9 million, up 4.4% compared to the same period in 2023. EBITDA (earnings before interest, taxes, depreciation and amortization) was BRL 46.1 million, up 58.7% quarter-on-quarter. Net profit for the period was BRL 1.7 million, better than in the first quarter of this year, when the company made a loss of BRL 5.1 million. However, there was a drop in comparison with the second quarter of 2023, when net profit was BRL 24.1 million, as a result of the non-cash exchange rate variation in the quarter.

“Our operating results, i.e. EBITDA, for the second quarter of 2024 were 58.7% better than in the second quarter of 2023. In the first half of the year, the improvement is even more significant, or 158.2% higher. This is all due to our strategy of increasing production, diluting costs, focusing on more profitable markets and more strategic clients,” explains Eduardo Miron, FriGol’s CEO.

Operating Results

In the second quarter of the year, the company slaughtered around 169,000 cattle, an increase of 23.4% compared to the second quarter of 2023, reflecting the investments made to increase production at its three units last year.

The volume sold increased by 16.6% quarter on quarter, with the largest share of increase coming from the domestic market, which proved to be more attractive with better margins. As a result, sales grew by 19.0%, with a significant increase in value-added products at the BBQ Secrets, Chef, Angus and Complete Butcher Shop lines.

In foreign markets, sales grew by 11.5% year-over-year. For Israel, the company’s second largest market, growth was 143.2%. As a result, FriGol had a 15.9% market share in exports from Brazil to Israel, an increase of 5.1 percentage points in the quarterly comparison. The volume exported to China fell by 1.8%. And, in line with the strategy of diversifying destinations, exports to other countries increased by 103.4% in volume.

In May, all FriGol units were authorized to export to the Philippines, which joins Indonesia and Singapore in the Association of Southeast Asian Nations (ASEAN) bloc of countries, to which the company already exports and considers to be a promising market. Also in the second quarter, the company made its first shipment to Canada, its first destination in North America.

The drop in net profit year-over-year (BRL 1.7 million in the second quarter of 2024 against BRL 24.1 million in the second quarter of 2023) was largely the result of the non-cash exchange rate variation of BRL 24.5 million in the first half.

FriGol ended June with cash of BRL 303.9 million, up 3.9% year-over-year. Leverage improved materially to 1.3x net debt/EBITDA against 2.4x in the second quarter of 2023 and 1.6x in the first quarter of 2024.

“These are extremely healthy results, reflecting our focus on financial discipline and efforts in working capital management. Later this year, we are working on new issues in continuity with our liability management process, including operations supported by our sustainability actions,” says Eduardo Masson, FriGol’s CFO.

Semester and last 12 months

In the first half of the year, FriGol accumulated net revenue of BRL 1.6 billion, an increase of 10.8% compared to the BRL 1.4 billion recorded in the first half of 2023. EBITDA in the period was BRL 68.2 million, 158.2% higher in the same comparison, with a margin of 4.2%.

In the last 12 months, net revenue was BRL 3.2 billion and accumulated EBITDA was BRL 188.6 million, with a margin of 5.8%.        

ESG

At the end of the semester, FriGol launched its Annual and Sustainability Report 2023, which brings together financial and operational results and makes public the company’s progress and goals on the ESG (environmental, social and governance) agenda. The report, published for the third year in a row, which follows the guidelines of the Global Reporting Initiative (GRI), there are aligned with the UN’s Sustainable Development Goals (SDGs).

About FriGol 

FriGol is one of Brazil’s leading and most traditional beef slaughterhouses. Founded in 1992 by the Gonzaga Oliveira family, which has been in the meat business since 1970, FriGol is strategically located in the states of São Paulo and Pará. Today, the company has a significant share of the national and international market, with a presence in more than 60 countries across North and South America, Europe, the Middle East, Asia and Africa.