FriGol records net profit of R$54.5 million in 2023
"It was the second best financial result in FriGol’s history. The annual comparison needs to be analyzed from the perspective that 2022 was positively atypical for the sector, while 2023 was a year marked by the suspension of exports to China, in addition to a war in the Middle East", points out Eduardo Miron, CEO of FriGol.
In 2023, FriGol invested to increase the production capacity of the three plants located in Lençóis Paulista (São Paulo), Água Azul do Norte and São Félix do Xingu (both in Pará). This resulted in the slaughter of 573,000 cattle during the year, an increase of 21% compared to 2022. It is the second consecutive year that the company has increased production by more than 20%.
"The increase in production was essential for us to achieve positive margins in both the domestic and foreign markets, as we gained more efficiency and achieved an important dilution in fixed costs", assesses Miron.
"Despite the higher slaughter volume, revenues were lower in comparison, due to a series of factors that occurred during the year, such as the average value of the arroba which fell by around 20%, accompanied by the drop in the price of meat on the national market. and abroad", points out Eduardo Masson, CFO of FriGol.
Sales prices to China, FriGol's main market, remained throughout the year below those practiced in 2022. In the first quarter there was the additional impact of almost a month of the self-embargo on exports to the country, following an atypical cow madness case. The company's second largest market, Israel, ended the year in war, also negatively influencing exports.
Aiming to diversify markets, the company expanded the portfolio of more than 60 countries to which it exports, gaining new qualifications in 2023 and making the first shipments to Indonesia and Singapore. The bloc of countries in the Association of Southeast Asian Nations (ASEAN) is seen as having great potential for the company.
The national market proved to be more attractive at times in 2023 and FriGol ended the year with the domestic market representing 50% of sales, compared to 47% in the previous year. The balance between the internal and external markets is considered a strategic differentiator by the company. The focus has been on expanding sales of higher value-added products, such as the FriGol Chef line and the "Açadogue Completo" products and services platform, which ended the year with 52 stores in partner supermarkets.
In the fourth quarter, FriGol recorded net revenue of R$855 million, an increase of 16% compared to the same period in 2022, and net profit of R$21 million, compared to a loss of R$22.5 million in the same period of 2022 EBITDA was R$72 million, 10 times higher, with a margin of 8.4%.
Strong demand from the domestic market, influenced by the end-of-year festivities in Brazil and purchases made in China for Chinese New Year, celebrated at the beginning of February 2024, contributed to this result.
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