Minerva Foods, a major player in the global meat industry, has disclosed its financial performance for the fourth quarter and the entirety of the 2023 fiscal year. Despite certain operational gains, the company faced a significant setback with a notable drop in net revenue, marking a challenging period for the renowned meat producer.

Net Revenue Plummets by 13.2% in Full 2023 Results

In a concerning development, Minerva Foods reported a stark decline in net revenue for the full 2023 fiscal year, tumbling by 13.2% to R$26.89 billion (US$5.38 billion). This downturn reflects a challenging economic landscape and various internal and external factors that have impacted the company’s financial standing.

Operational Highlights Amidst Revenue Struggles

Despite the revenue setback, Minerva Foods showcased notable operational achievements throughout the fiscal year. Total slaughter for the period saw a modest increase of 3.3%, totaling 3.87 million head, while total sales volume experienced a commendable growth of 5.4% year-on-year, reaching 1.29 million metric tons. These operational metrics highlight the company’s resilience amidst challenging market conditions.

Gross Revenue and EBITDA Experience Declines

In tandem with the drop in net revenue, Minerva Foods witnessed declines in both gross revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) for the fiscal year. Gross revenue slumped by 12.9% to R$28.64 billion (US$5.75 billion), signaling broader challenges in revenue generation. Meanwhile, EBITDA registered a 9.7% decrease, amounting to R$2.56 billion (US$514.35 million), albeit with a margin improvement to 9.5%. These figures underscore the company’s struggle to maintain profitability amidst adverse market conditions.

Fourth Quarter Performance Shows Mixed Results

In the fourth quarter of 2023, Minerva Foods witnessed a mix of performance indicators, reflecting both positive and negative trends. Total slaughter surged by an impressive 26.1% to 1.08 million head, indicating operational vigor during the period. However, gross revenue for the quarter declined by 11.2% to R$6.51 billion (US$1.3 billion), suggesting ongoing challenges in revenue generation. Similarly, EBITDA experienced a marginal decrease of 0.3% to R$605.9 million (US$121.74 million), despite a slight margin improvement to 9.8%. These figures underscore the company’s struggle to achieve sustained growth amidst a volatile economic environment.

Export Dynamics and Geographic Distribution

Amidst challenging market conditions, Minerva Foods continued to maintain a significant presence in international markets, with exports constituting a substantial portion of its gross revenue. Notably, exports accounted for 67.2% of gross revenue in the fourth quarter and 65% for the full fiscal year, underscoring the company’s reliance on global markets for revenue generation. Geographically, Asia emerged as a key export destination, representing 40% of total exports in 2023, followed by increased exports to the Americas at 20%. Despite challenges, Minerva Foods demonstrated resilience in diversifying its export markets, mitigating risks associated with regional economic fluctuations.

Slaughter Metrics and Consolidated Performance

Minerva Foods maintained a steady pace of operations in terms of slaughter metrics throughout the fiscal year. Cattle slaughter witnessed a modest increase of 3% year-on-year, totaling 3.87 million head, with a significant uptick observed in the fourth quarter, up by 26% to 1.08 million head. Similarly, consolidated sheep slaughter experienced a notable increase of 5% in the fourth quarter, totaling 1.1 million head, and reaching 3.9 million for the full year. These operational metrics underscore the company’s commitment to maintaining production levels amidst challenging market conditions.

In conclusion, Minerva Foods’ financial results for the full 2023 fiscal year reflect a challenging period marked by revenue declines and operational headwinds. Despite facing significant challenges, the company demonstrated resilience in operational metrics and export diversification efforts, signaling a cautious optimism for the future amidst ongoing market uncertainties.

Related: A snapshot of Minerva’s poor third quarter results

Source include: International leather maker, Sharecast & Market Screener.

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